<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: January 19, 2000 Commission file number 1-5805
THE CHASE MANHATTAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-2624428
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
270 Park Avenue, New York, NY 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 270-6000
1
<PAGE>
Item 5. Other Events
- --------------------
The Chase Manhattan Corporation ("Chase") announced on January 19, 2000
operating diluted earnings per share of $1.97 in the fourth quarter of 1999, up
50 percent from $1.31 per share in the fourth quarter of 1998. Reported diluted
earnings per share were $1.98 in the 1999 fourth quarter, up 51 percent from
$1.31 in the fourth quarter of 1998. Diluted operating earnings per share for
the full year 1999 increased 38 percent to $6.21 from $4.51 in 1998. Operating
earnings rose to $5.39 billion from $4.02 billion in 1998. Reported net income
for the full year was $5.45 billion, compared with $3.78 billion in 1998.
Operating results (revenues, expenses and earnings) exclude the impact of credit
card securitizations, restructuring costs and special items.
At an analyst meeting held on January 19, 2000 following the release of
earnings (which was open to investors and the press and "webcast" live on the
Internet), management of Chase discussed fourth quarter and full year 1999
results. At the meeting, management indicated that:
- The compound annual growth rate of market-sensitive revenues, based upon
a logarithmic regression of total market-sensitive revenues over the period
1988-1999 (not including any market-sensitive revenues from Hambrecht and Quist
Group), was 15%. Chase's market-sensitive revenues for full year 1999 would have
increased by approximately 11% had Hambrecht and Quist Group's market-sensitive
revenues been included for full year 1999.
- Global Services is targeting double digit revenue growth in its investor
services and fiduciary services businesses for full year 2000. In addition,
Chase expects to effect certain efficiency improvements in its Global Services
business during the year.
- National Consumer Services is targeting double digit earnings growth for
full year 2000, primarily as a result of expense management, the continued
effects of improved credit quality and continuing moderate revenue growth. The
credit card net charge-off ratio for full year 2000 is anticipated to be lower
than for the full year 1999.
- Expense management will include longer-term strategic restructuring
initiatives, such as relocations of operations for Global Services businesses
and consumer call centers, and other business initiatives, such as
consolidations of operations. In the fourth quarter of 1999, Chase took a
restructuring charge of $100 million associated with its business consolidation
initiatives and a charge of $75 million in connection with its relocation
initiatives. Chase anticipates realizing approximately $80 million annually in
savings from its business consolidation initiatives, commencing in 2001. In
addition, Chase anticipates that the total cost of its relocation initiatives to
amount to approximately $360 million (including the aforementioned $75 million
charge taken in 1999, an additional $200 million of expenses expected to be
incurred in 2000, and expenses of approximately $85 million expected to be
incurred in 2001). Savings from the relocation initiatives are expected to be
approximately $50 million in 2001, eventually increasing to approximately $130
million annually.
- As previously disclosed in its Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999, Chase has identified some deficiencies in the
computerized bond recordkeeping system in the bond paying agency function within
Chase's Capital Markets Fiduciary Services group and has a project underway to
remedy those deficiencies. Expenses in Global Services during the fourth quarter
included costs associated with that project. While management considers it
likely that additional costs will be incurred during the remaining course of the
project, it does not, based upon its experience to date, expect them to be
material. The Securities and Exchange Commission has commenced an investigation
relating to the question of whether, in connection with this matter, there have
been violations of its transfer agency recordkeeping or reporting regulations
and whether Chase's disclosures regarding these issues have been adequate and
timely.
A copy of Chase's earnings press release is attached as an exhibit hereto.
The information contained herein and in the press release may contain statements
that are forward looking within the meaning of the Private Securities Litigation
Act of 1995. Such statements are subject to risks and uncertainties and Chase's
actual result may differ materially from those set forth in such forward looking
statements. Those uncertainties may include, among others, the risk of adverse
impacts from an economic downturn, increased competition, unfavorable political
or other developments in foreign markets, governmental or regulatory policies,
market volatility in securities markets, interest or foreign exchange rates and
other factors impacting Chase's operational plans or the adequacy of Chase's
allowance for credit losses. For a more detailed discussion of these
uncertainties, reference is made to Chase's reports filed with the Securities
and Exchange Commission, in particular Chase's Annual Report on Form 10-K for
the year ended December 31, 1998.
2
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
The following exhibit is filed with this report:
Exhibit Number Description
99.1 Press Release - 1999 Fourth Quarter Earnings.
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE CHASE MANHATTAN CORPORATION
(Registrant)
Dated January 21, 2000 by /s/JOSEPH L. SCLAFANI
- ------------------ ----------------------------------
Joseph L. Sclafani
Executive Vice President and Controller
[Principal Accounting Officer]
4
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page at Which Located
99.1 Press Release - 1999 Fourth
Quarter Earnings 6
5
<PAGE>
<PAGE>
The Chase Manhattan Corporation
270 Park Avenue
New York, NY 10017-2070
Investor Contact: John Borden 212-270-7318 Press Contacts: Jon Diat 212-270-5089
Jim Finn 212-270-7438
{Chase Letterhead}
News Release
Chase Manhattan Reports Record Fourth Quarter and Full Year 1999 Results;
Announces New $5 Billion Common Stock Repurchase Authorization
New York, January 19, 2000 - The Chase Manhattan Corporation (NYSE:CMB)
today reported fourth quarter 1999 diluted operating earnings per share of
$1.97, a 50 percent increase from $1.31 per share in the same 1998 quarter.
Operating earnings and reported net income in the fourth quarter of 1999 were
$1.68 billion and $1.69 billion respectively. Operating earnings and reported
net income were $1.15 billion in the 1998 fourth quarter.
Diluted operating earnings per share for the full year 1999 increased 38
percent to $6.21 from $4.51 in 1998. Operating earnings rose to $5.39 billion
from $4.02 billion in 1998. Reported net income for the full year was $5.45
billion, compared with $3.78 billion in 1998.
Fourth Quarter 1999 Highlights
- - Record private equity gains of $1.31 billion
- - Strong investment banking and trading results
- - Chase H&Q integration moving smoothly and quickly
- - Solid National Consumer Services earnings
Full Year Financial Highlights
- - Operating earnings per share increased 38 percent
- - Revenues were up 17 percent
- - Return on equity of 24 percent
- - Repurchased net $2.3 billion of common stock
- - Increased common dividend 14 percent
"1999 was a terrific year for Chase and these results provide a strong
signal that this company is capable of producing exceptional returns," said
William B. Harrison, Jr., Chairman and Chief Executive Officer. "Both fourth
quarter and full year results demonstrate clearly that the new equation at Chase
has fully emerged.
<PAGE>
"Market leadership positions and financial discipline provide a durable
platform for growth while focused acquisitions and portfolio investments
continue to provide significant upside opportunities," continued Mr. Harrison.
"The creation of Chase.com, the acquisition of Hambrecht & Quist, and the
accelerated investment pace of Chase Capital Partners are the types of
opportunities from which Chase will continue to benefit. While revenues from
private equity investments may vary from quarter to quarter, we believe that the
Chase Capital Partners business system will be a significant long-term source of
value creation."
Chase's Board of Directors also authorized the repurchase of up to $5
billion of Chase's common stock in the open market or through negotiated
transactions. This authorization is in addition to any amounts necessary to
provide for issuances under Chase's dividend reinvestment plan and its various
stock-based director and employee benefit plans. The new authorization becomes
effective immediately.
"Chase is totally committed to Shareholder Value Added," explained Mr.
Harrison. "A disciplined capital policy is a key component of that commitment."
At year-end, Chase's Tier One capital ratio was at the upper end of its target
range of 8 to 8.25 percent. Capital generated in excess of target ratios will be
used for continued purchases of Chase common stock, or for future investment and
acquisition opportunities.
Financial Performance
<TABLE>
<CAPTION>
- ----------------------------------------------- ------------------------------------------ -------------------------------------
THE CHASE MANHATTAN CORP Fourth Quarter Full Year 1999
- ----------------------------------------------- ------------------------------------------ -------------------------------------
<S> <C> <C> <C> <C>
(dollars in millions) 1999 O(U)1998 1999 O(U)1998
Operating Revenues $6,444 $1,100 21% $22,982 $3,369 17%
Cash Operating Earnings 1,761 542 44 5,691 1,414 33
Shareholder Value Added 1,027 557 119 2,763 1,357 97
Cash Return on Common Equity 31.6% 1,020bp -- 25.6% 600bp --
- ----------------------------------------------- --------------- ------------- ------------ ------------ ------------ -----------
</TABLE>
Line-Of-Business Results
<TABLE>
<CAPTION>
- --------------------------------------------- ------------------------------------------ --------------------------------------
GLOBAL BANK Fourth Quarter Full Year 1999
- --------------------------------------------- ------------------------------------------ --------------------------------------
<S> <C> <C> <C> <C> <C>
(dollars in millions) 1999 O(U)1998 O(U)3Q1999 1999 O(U) 1998
Operating Revenues $3,214 46% 44% $10,379 2,424 30%
Cash Operating Earnings 1,209 78 82 3,564 1,177 49
Shareholder Value Added 766 189 210 1,885 1,109 143
Cash Return on Common Equity 36.0% 1,450bp 1,510bp 27.9% 850bp --
- --------------------------------------------- ----------- -------------- --------------- ------------ ------------- -----------
</TABLE>
Cash operating earnings in the Global Bank were $1.21 billion in the 1999
fourth quarter, compared with $680 million in the prior-year quarter. Operating
revenues of $3.21 billion in the fourth quarter of 1999 were 46 percent higher
than in the 1998 fourth quarter. For the year, operating revenues and cash
operating earnings rose 30 percent and 49 percent, respectively, from 1998
levels. Shareholder value added in the 1999 fourth quarter was $766 million,
compared with shareholder value added of $265 million in the 1998 fourth
quarter. For the year, shareholder value added increased to $1.89 billion,
compared with $776 million for 1998.
<PAGE>
- Private equity-related investment gains in the fourth quarter were $1.31
billion, compared with $244 million in the fourth quarter of 1998. These results
were significantly higher than in any prior quarter and reflect the rapid growth
of investments over the past five years, early focus on New Economy businesses,
and a vibrant equity market. Strong fourth quarter revenues are the result of
initial public offerings of portfolio investments, such as Cobalt Networks,
Triton PCS, and Telecorp; from appreciation in market values of public
securities owned throughout the quarter, such as Digital Island and Stamps.com;
and from sales of securities in both the private and public portions of the
portfolio (see page 18 for a detailed description of private equity
investments).
- Investment banking fees in the 1999 fourth quarter increased to $499
million, a 31 percent increase from the fourth quarter of 1998. These results
reflect strong syndicated finance activity, ongoing momentum in Chase's merger
and acquisitions and bond practices, and strong performance from Chase H&Q
during the period following its acquisition on December 9. Investment banking
fees for the year rose 26 percent to $1.89 billion, benefiting from significant
market share growth in loan syndications, mergers and acquisitions advisory, and
corporate bond underwriting, plus focused initiatives in Europe and the New
Economy. Over the past five years, Chase's investment banking fees have
increased at a compound annual growth rate of 26 percent.
- Total trading revenues, including related net interest income, were $633
million in the fourth quarter. Despite Year 2000-induced slowdowns in several
markets, both active market making businesses and market share gains continued
to drive results. For the full year, trading revenues, including related net
interest income, totalled $2.88 billion, a 48 percent increase. Investment
securities activities had securities losses of $59 million in the fourth
quarter, compared to securities gains of $167 million in the similar period of
1998. For the full year, securities gains were $101 million, a decrease of $508
million from 1998. The investment portfolio is managed on a total return basis,
including realized and unrealized gains and losses on the securities and the
assets and liabilities being hedged. Total market return for full-year 1999 was
$278 million versus $523 million in 1998.
<TABLE>
<CAPTION>
- --------------------------------------------- ------------------------------------------ --------------------------------------
GLOBAL SERVICES Fourth Quarter Full Year 1999
- --------------------------------------------- ------------------------------------------ --------------------------------------
<S> <C> <C> <C> <C> <C>
(dollars in millions) 1999 O(U)1998 O(U)3Q1999 1999 O(U)1998
Operating Revenues $812 7% 1% $3,120 $294 10%
Cash Operating Earnings 127 (5%) (16) 525 39 8
Shareholder Value Added 31 (35%) (44) 145 (48) (25)
Cash Return on Common Equity 17.2% (320bp) (340bp) 18.1% (370bp) --
- --------------------------------------------- ----------- -------------- --------------- ------------ ------------- -----------
</TABLE>
In the fourth quarter, Global Service's operating revenues rose seven
percent, primarily reflecting increased business activity in Capital Markets
Fiduciary Services, Chase's trust business, and a slowdown in Global Investor
Services, Chase's custody business. Cash operating earnings decreased five
percent to $127 million as expenses in the quarter rose 12 percent, reflecting
costs to address record keeping functions related to bond administration in
Capital Markets Fiduciary Services.
<PAGE>
For the full year, Global Service's operating revenues increased 10 percent
and cash operating earnings were eight percent higher than in 1998. Of Global
Services' three major business lines, two had strong revenue growth in 1999: up
20 percent at Global Investor Services, and up 16 percent at Capital Markets
Fiduciary Services. Revenues at Treasury Solutions, Chase's cash management
business, were consistent with last year's level, primarily reflecting the
significant decline in excess balances during the course of the year.
<TABLE>
<CAPTION>
- ---------------------------------------------- ----------------------------------------- --------------------------------------
NATIONAL CONSUMER SERVICES Fourth Quarter Full Year 1999
- ---------------------------------------------- ----------------------------------------- --------------------------------------
<S> <C> <C> <C> <C> <C>
(dollars in millions) 1999 O(U)1998 O(U)3Q1999 1999 O(U)1998
Operating Revenues $2,503 2% -- % $9,847 $698 8%
Cash Operating Earnings 426 2 (2) 1,677 232 16
Shareholder Value Added 156 (3) (10) 636 218 52
Cash Return on Common Equity 20.7% (70bp) (110bp) 21.1% 260bp --
- ---------------------------------------------- ---------- -------------- --------------- ------------ ------------- -----------
</TABLE>
Operating revenues for National Consumer Services increased to $2.5
billion, an increase of two percent over the fourth quarter of 1998. Cash
operating earnings of $426 million increased by two percent as increased
business activity and improved credit costs were partially offset by significant
investments in internet and technology activities. For the full year, 1999
revenue was up eight percent and NCS achieved record cash operating earnings of
$1.68 billion, up 16 percent over 1998. The increase in cash operating earnings
was a result of both business volume growth and lower credit costs. Shareholder
Value Added of $636 million was 52% better than in 1998 due to the improvement
in earnings and the disciplined use of capital.
- Cash operating earnings for cardmember services increased 11 percent in
the fourth quarter. The increase reflects significantly improved credit quality.
Fourth quarter operating revenues declined six percent, due to lower yields and
fees as a result of the improving credit quality of the portfolio, and as a
result of higher interest rates. For the year, cash operating earnings were up
16 percent to $523 million. The increase in cash operating earnings reflects a
two percent increase in revenue and improved credit quality due to lower
consumer bankruptcies and enhanced collections performance. The cash return on
managed assets for the full year was 1.45 percent.
- Home finance revenues increased to $341 million, a 21 percent increase
from fourth quarter 1998, and cash operating earnings rose 10 percent, primarily
as a result of growth in servicing and portfolio levels. For full year 1999,
home finance revenues were 18 percent higher than in the prior year, due to
higher volumes of originations and servicing, and cash operating earnings
increased by 13 percent.
- Regional consumer banking revenues rose eight percent from the fourth
quarter of 1998, reflecting higher deposit levels, the benefit from higher
interest rates, and growth in consumer banking fees. Cash operating earnings
grew by 15 percent. Revenues and cash operating earnings for the full year
increased by nine percent and 17 percent, respectively over 1998.
<PAGE>
- Revenues from diversified consumer services were $280 million in the
fourth quarter, down two percent from the same 1998 quarter as auto origination
levels have slowed from peak levels in late 1998 and early 1999. For the full
year, revenues from diversified consumer services were up 20 percent while cash
operating earnings increased 33 percent.
- Middle Market revenues were $251 million, up two percent from the fourth
quarter of 1998. Cash operating earnings increased four percent over the prior
year quarter. These results reflect growth in loan volume along with improved
credit quality and disciplined expense management. For the year, middle market
revenues were up two percent and cash operating earnings increased four percent.
Additional Financial Information
- Chase acquired Hambrecht & Quist Group for $1.46 billion on December 9.
Chase H&Q is one of the leading providers of investment banking services to
companies in the highest growth sectors of the global economy, where media,
telecommunications, information technology and the internet converge. The
integration efforts are proceeding smoothly with revenues exceeding initial
expectations. Although Chase only benefited from H&Q's revenues from December 9,
total fourth quarter revenues for H&Q were $371 million, compared to average
quarterly revenue of approximately $163 million for the previous four reported
quarters.
- Total assets at December 31, 1999 were $406 billion compared with $371
billion at September 30, 1999 and $366 billion from a year ago. Management
estimates that approximately $28 billion of the increase in assets and $10
billion of the deposit increase from September 30, 1999, is a result of Year
2000-related Chase balance sheet management actions and cash management
activities of clients. Chase's Tier One capital ratio was 8.2 percent at
December 31, 1999, compared with 8.3 percent on December 31, 1998, despite the
temporary growth in the year-end balance sheet and net repurchases of $2.3
billion during the year.
- On a managed basis, including securitizations, net credit losses were
$810 million in the fourth quarter of 1999, up from $633 million in the third
quarter of 1999 and up from $695 million from the fourth quarter of 1998.
Consumer net charge-offs, on a managed basis, were $523 million, down from $531
million in the third quarter of 1999 and $579 million in the fourth quarter of
1998, primarily reflecting a decline in the 1999 fourth quarter in the credit
card net charge-off ratio to 5.24 percent. Commercial net charge-offs in the
fourth quarter of 1999 were $287 million, compared with $102 million in the
third quarter of 1999 and $116 million in the fourth quarter of 1998, reflecting
a charge-off related to one large Asian credit. For the fourth quarter of 1999,
total net charge-offs on a reported basis were $570 million and the provision
for credit losses was $454 million. The allowance for loan losses declined by
$98 million to $3.46 billion at year-end. Nonperforming assets at December 31,
1999, were $1.80 billion compared with $2.02 billion at September 30, 1999 and
$1.61 billion at December 31, 1998.
<PAGE>
- Total operating noninterest expenses increased 12 percent to $12.1
billion in 1999, and were up 11 percent to $3.2 billion in the fourth quarter,
reflecting higher incentives related to revenue increases as well as investment
spending and costs related to Year 2000 issues.
- Operating results (revenues, expenses and earnings) for 1999 exclude the
impact of credit card securitizations, restructuring costs and special items.
The 1999 fourth quarter reported results included interest income from prior
years' tax refunds of $62 million and a net restructuring charge of $48 million.
The net restructuring charge reflects a $75 million charge taken in connection
with planned staff reductions and premises and equipment dispositions resulting
from the relocation of several business functions, and a $100 million charge
associated with restructuring actions undertaken in certain businesses. These
charges were partially offset by the reversal of $127 million of costs primarily
related to occupancy not fully utilized under the $510 million charge taken in
1998.
The Chase Manhattan Corporation is one of the world's premier financial
services institutions, with operations in 48 countries around the globe. Chase
has a top-tier ranking in all areas of investment banking, private banking,
trading and global markets activities as well as information and transaction
processing. Chase, a leading provider of financial solutions to large
corporations, financial institutions, government entities, middle market firms,
small businesses and individuals, has relationships with more than 30 million
consumers across the United States through products and services such as credit
cards, mortgages, online banking, debit cards, deposit products and auto loans.
Chase can be reached on the Web at www.chase.com. A live audio webcast of
Chase's fourth quarter and full year 1999 analyst presentation will be available
in the investor relations site of www.chase.com at 11 a.m. on January 19, 2000.
This press release contains forward-looking statements. Those statements
are based on management's current expectations or beliefs and are subject to a
number of factors and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements. For a
discussion of certain factors that could cause actual results to differ
materially from those described in the forward-looking statements, please refer
to Chase's filings with the Securities and Exchange Commission, particularly the
section entitled "Important Factors that may Affect Future Results" in Chase's
Annual Report on Form 10-K for the year ended December 31, 1998.
<PAGE>
THE CHASE MANHATTAN CORPORATION
SUMMARY OF SELECTED FINANCIAL HIGHLIGHTS
(in millions, except per share and ratio data)
<TABLE>
<CAPTION>
% %
As of or for the period ended Fourth Quarter Over/(Under) For The Year Over/(Under)
------------------------- ---------------------------
---------- -----------
1999 1998 1998 1999 1998 1998
---------- ----------- ---------- ----------- ------------ ---------
OPERATING BASIS (a)
<S> <C> <C> <C> <C> <C> <C>
Operating Revenue $ 6,444 $ 5,344 21% $ 22,982 $ 19,613 17%
Operating Noninterest Expense 3,179 2,873 11% 12,073 10,817 12%
Credit Costs (b) 694 695 -- 2,614 2,491 5%
Operating Earnings $ 1,683 $ 1,146 47% $ 5,394 $ 4,016 34%
Operating Earnings Per Share:
Basic $ 2.04 $ 1.34 52% $ 6.42 $ 4.63 39%
Diluted 1.97 1.31 50% 6.21 4.51 38%
Cash Operating Earnings $ 1,761 $ 1,219 44% $ 5,691 $ 4,277 33%
Cash Operating Earnings Per Share - Diluted 2.06 1.39 48% 6.56 4.81 36%
Shareholder Value Added (SVA) 1,027 470 119% 2,763 1,406 97%
Operating Performance Ratios:
Return on Average Managed Assets (c) 1.65 % 1.15 % 1.39 % 1.03 %
Return on Average Common Equity (c) 30.2 20.1 24.2 18.4
Common Dividend Payout Ratio 20 27 26 31
Efficiency Ratio (d) 49 54 52 55
Selected Balance Sheet Items at Period End: (e)
Managed Loans $ 194,098 $ 190,787 2%
Total Managed Assets 424,044 383,908 10%
- ----------------------------------------------------------------------------------------------------------------------------------
AS REPORTED BASIS
Revenue $ 6,266 $ 5,060 24% $ 22,217 $ 18,656 19%
Noninterest Expense (Excluding Restructuring Costs) 3,179 2,873 11% 12,173 10,854 12%
Restructuring Costs 48 - NM 48 529 (91%)
Provision for Loan Losses 454 411 10% 1,621 1,343 21%
Net Income $ 1,693 $ 1,146 48% $ 5,446 $ 3,782 44%
Net Income Per Share:
Basic $ 2.05 $ 1.34 53% $ 6.49 $ 4.35 49%
Diluted 1.98 1.31 51% 6.27 4.24 48%
Cash Dividends Declared 0.41 0.36 14% 1.64 1.44 14%
Share Price at Period End 77.69 71.00 9%
Book Value at Period End 27.43 26.90 2%
Common Shares Outstanding:
Average Common Shares:
Basic 817.5 842.3 (3%) 828.8 846.1 (2%)
Diluted 845.3 863.0 (2%) 857.0 869.3 (1%)
Common Shares at Period End 827.2 848.0 (2%)
Performance Ratios:
Return on Average Total Assets (c) 1.73 % 1.20 % 1.47 % 1.01 %
Return on Average Common Equity (c) 30.4 20.1 24.5 17.3
Selected Balance Sheet Items at Period End:
Loans $ 176,159 $ 172,754 2%
Total Assets 406,105 365,875 11%
Deposits 241,745 212,437 14%
Total Stockholders' Equity 23,617 23,838 (1%)
Capital Ratios:
Tier I Capital Ratio 8.2 %(f) 8.3 %
Total Capital Ratio 11.8 (f) 12.0
Tier I Leverage 6.6 (f) 6.4
(a) Excludes the impact of credit card securitizations, restructuring costs and special items. For a reconciliation of Reported
Results as shown on the Consolidated Statement of Income to results on an Operating Basis, see page 12.
(b) Includes provision for loan losses and credit costs related to the securitized credit card portfolio.
(c) Ratios for the fourth quarter of 1999 and 1998 are based on annualized amounts.
(d) Noninterest expense as a percentage of the total of net interest income and noninterest revenue (excluding restructuring costs,
special items and costs associated with the REIT).
(e) Excludes the impact of credit card securitizations.
(f) Estimated
Certain amounts throughout the financial tables have been reclassified to conform to the current presentation.
NM - Not meaningful
Unaudited
</TABLE>
<PAGE>
THE CHASE MANHATTAN CORPORATION
LINES OF BUSINESS RESULTS
(in millions, except ratios)
<TABLE>
<CAPTION>
Global Bank National Consumer Services Global Services Total (a)
--------------------- ---------------------------- -------------------- -------------------------
Fourth Quarter Over/ Over/ Over/ Over/
1999 (Under) 1998 1999 (Under) 1998 1999 (Under) 1998 1999 (Under) 1998
____________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Revenue $ 3,214 $ 1,019 46% $ 2,503 $ 41 2% $ 812 $ 53 7% 6,444 $ 1,100 21%
Operating Earnings 1,193 523 78 387 14 4 111 (8) (7) 1,683 537 47
Cash Operating Earnings 1,209 529 78 426 10 2 127 (6) (5) 1,761 542 44
Average Common Equity 13,247 873 7 8,079 471 6 2,882 337 13 21,917 (385) (2)
Average Managed Assets (b) 248,243 (2,593) (1) 135,005 13,370 11 16,227 (870) (5) 405,524 8,970 2
Shareholder Value Added (SVA) 766 501 189 156 (4) (3) 31 (17) (35) 1,027 557 119
Cash Return on Common Equity 36.0% 1,450bp 20.7% (70)bp 17.2% (320)bp 31.6% 1,020bp
Cash Efficiency Ratio 37 (900) 52 300 76 400 48 (400)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
GLOBAL BANK
KEY FINANCIAL MEASURES
<TABLE>
<CAPTION>
Fourth Quarter 1999 Over/(Under) 1998
------------------------------------------ -----------------------------------------
Operating Cash Cash Operating Cash Cash
Revenues Operating Efficiency Revenues Operating Efficiency
Earnings Ratio Earnings Ratio
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Markets $ 888 $ 269 54% (15)% (30)% 1,400bp
Chase Capital Partners 1,255 772 4 419 485 (700)
Global Investment Banking 481 100 67 56 18 1,200
Corporate Lending 394 137 32 (9) (11) 400
Global Private Bank 229 37 73 7 (5) 400
Other Global Bank (33) (106) NM NM NM NM
------------ ------------
Totals $ 3,214 $ 1,209 37% 46% 78% (900)bp
============ ============
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NATIONAL CONSUMER SERVICES
KEY FINANCIAL MEASURES
<TABLE>
<CAPTION>
Fourth Quarter 1999 Over/(Under) 1998
------------------------------------------ ------------------------------------------
Operating Cash Cash Operating Cash Cash
Revenues Operating Efficiency Revenues Operating Efficiency
Earnings Ratio Earnings Ratio
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Chase Cardmember Services $ 984 $ 140 35% (6)% 11% - bp
Regional Consumer Banking 630 118 66 8 15 (200)
Chase Home Finance 341 79 58 21 10 500
Diversified Consumer Services 280 38 57 (2) (36) 1,000
Middle Markets 251 59 55 2 4 -
Other NCS 17 (8) NM NM NM NM
============ ============
Totals $ 2,503 $ 426 52% 2% 2% 300bp
============ ============
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: SVA is Chase's primary measure of business unit performance. SVA
represents operating earnings excluding the amortization of goodwill and certain
intangibles (i.e., cash operating earnings), less preferred dividends and an
explicit charge for allocated capital. During 1999 organizational changes
occurred that are reflected in the lines of business results. The Middle Markets
business, which previously reported into the Global Bank franchise, now reports
into the National Consumer Services franchise and the Global Asset Management
and Mutual Funds business, which previously was included in Corporate, now
reports into the Global Bank franchise. Prior periods have been restated.
(a)Total column includes Chase.com and the effects remaining at the
Corporate level after the implementation of management accounting policies.
(b)Excludes the impact of credit card securitizations.
NM - Not meaningful
bp -basis points
Unaudited
<PAGE>
THE CHASE MANHATTAN CORPORATION
LINES OF BUSINESS RESULTS
(in millions, except ratios)
<TABLE>
<CAPTION>
Global Bank National Consumer Services Global Services Total (a)
------------------------ --------------------------- ----------------------- ---------------------------
For The Year 1999 Over/ 1999 Over/ 1999 Over/ 1999 Over/
(Under) 1998 (Under) 1998 (Under) 1998 (Under) 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Revenue $10,379 $2,424 30% $ 9,847 $ 698 8% $ 3,120 $ 294 10% $ 22,982 $ 3,369 17%
Operating Earnings 3,513 1,168 50 1,518 241 19 463 6 1 5,394 1,378 34
Cash Operating Earnings 3,564 1,177 49 1,677 232 16 525 39 8 5,691 1,414 33
Average Common Equity 12,616 640 5 7,823 180 2 2,855 672 31 21,977 649 3
Average Managed Assets (b) 235,197 (16,166) (6) 129,314 10,268 9 16,540 2,204 15 387,858 (3,364) (1)
Shareholder Value Added (SVA) 1,885 1,109 143 636 218 52 145 (48) (25) 2,763 1,357 97
Cash Return on Common Equity 27.9% 850bp 21.1% 260bp 18.1% (370)bp 25.6% 600bp
Cash Efficiency Ratio 43 (600) 50 - 74 200 51 (300)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
GLOBAL BANK
KEY FINANCIAL MEASURES
For The Year 1999 Over/(Under) 1998
-------------------------------------- -------------------------------------
Operating Cash Cash Operating Cash Cash
Revenues Operating Efficiency Revenues Operating Efficiency
Earnings Ratio Earnings Ratio
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Markets $ 4,090 $ 1,369 48% 20% 35% (400)bp
Chase Capital Partners 2,330 1,383 7 178 210 (800)
Global Investment Banking 1,576 335 66 25 15 400
Corporate Lending 1,546 548 29 (2) (2) 100
Global Private Bank 887 169 67 4 (6) 300
Other Global Bank (50) (240) NM NM NM NM
----------- ----------
Totals $ 10,379 $ 3,564 43% 30% 49% (600)bp
=========== ==========
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NATIONAL CONSUMER SERVICES
KEY FINANCIAL MEASURES
For The Year 1999 Over/(Under) 1998
----------------------------------------- ----------------------------------------
Operating Cash Cash Operating Cash Cash
Revenues Operating Efficiency Revenues Operating Efficiency
Earnings Ratio Earnings Ratio
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Chase Cardmember Services $ 4,004 $ 523 35% 2% 16% - bp
Regional Consumer Banking 2,410 420 69 9 17 (200)
Chase Home Finance 1,212 284 58 18 13 200
Diversified Consumer Services 1,125 187 53 20 33 -
Middle Markets 980 233 55 2 4 -
Other NCS 116 30 NM NM NM NM
=========== ===========
Totals $ 9,847 $ 1,677 50% 8% 16% - bp
=========== ===========
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: SVA is Chase's primary measure of business unit performance. SVA
represents operating earnings excluding the amortization of goodwill and certain
intangibles (i.e., cash operating earnings), less preferred dividends and an
explicit charge for allocated capital. During 1999 organizational changes
occurred that are reflected in the lines of business results. The Middle Markets
business, which previously reported into the Global Bank franchise, now reports
into the National Consumer Services franchise and the Global Asset Management
and Mutual Funds business, which previously was included in Corporate, now
reports into the Global Bank franchise. Prior periods have been restated.
(a) Total column includes Chase.com and the effects remaining at the
Corporate level after the implementation of management accounting policies.
(b)Excludes the impact of credit card securitizations.
NM - Not meaningful
bp -basis points
Unaudited
<PAGE>
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
<TABLE>
<CAPTION>
% %
Fourth Quarter Over/(Under) For The Year Over/(Under)
---------------------- ------------------------
--------- --------- ---------- ----------
1999 1998 1998 1999 1998 1998
--------- --------- -------- ---------- ---------- ---------
INTEREST INCOME
<S> <C> <C> <C> <C> <C> <C>
Loans $ 3,451 $ 3,381 $ 13,113 $ 13,389
Securities 872 964 3,216 3,616
Trading Assets 477 435 1,705 2,431
Federal Funds Sold and Securities Purchased
Under Resale Agreements 329 469 1,451 2,211
Deposits with Banks 212 192 752 642
--------- --------- ---------- ----------
Total Interest Income 5,341 5,441 20,237 22,289
--------- --------- ---------- ----------
INTEREST EXPENSE
Deposits 1,786 1,717 6,592 6,840
Short-Term and Other Borrowings 1,018 1,247 3,653 5,612
Long-Term Debt 312 317 1,248 1,271
--------- --------- ---------- ----------
--------- --------- ---------- ----------
Total Interest Expense 3,116 3,281 11,493 13,723
--------- --------- ---------- ----------
NET INTEREST INCOME 2,225 2,160 3% 8,744 8,566 2%
Provision for Loan Losses 454 411 10% 1,621 1,343 21%
--------- --------- ---------- ----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,771 1,749 1% 7,123 7,223 (1%)
--------- --------- ---------- ----------
NONINTEREST REVENUE
Investment Banking Fees 499 381 31% 1,887 1,502 26%
Trust, Custody and Investment Management Fees 469 414 13% 1,801 1,543 17%
Credit Card Revenue 440 428 3% 1,698 1,474 15%
Fees for Other Financial Services 719 552 30% 2,496 2,093 19%
Trading Revenue 531 516 3% 2,137 1,238 73%
Securities Gains (Losses) (59) 167 NM 101 609 (83%)
Private Equity Gains 1,307 244 436% 2,522 967 161%
Other Revenue 135 198 (32%) 831 664 25%
--------- --------- ---------- ----------
Total Noninterest Revenue 4,041 2,900 39% 13,473 10,090 34%
--------- --------- ---------- ----------
NONINTEREST EXPENSE
Salaries 1,461 1,296 13% 5,678 5,025 13%
Employee Benefits 233 194 20% 964 854 13%
Occupancy Expense 224 220 2% 866 798 9%
Equipment Expense 278 250 11% 1,015 890 14%
Other Expense 983 913 8% 3,650 3,287 11%
--------- --------- ---------- ----------
Total Noninterest Expense Before Restructuring Costs 3,179 2,873 11% 12,173 10,854 12%
Restructuring Costs (a) 48 -- NM 48 529 (91%)
--------- --------- ---------- ----------
--------- --------- ---------- ----------
Total Noninterest Expense 3,227 2,873 12% 12,221 11,383 7%
--------- --------- ---------- ----------
INCOME BEFORE INCOME TAX EXPENSE 2,585 1,776 46% 8,375 5,930 41%
Income Tax Expense 892 630 42% 2,929 2,148 36%
--------- --------- ---------- ----------
========= ========= ========== ==========
NET INCOME $ 1,693 $ 1,146 48% $ 5,446 $ 3,782 44%
========= ========= ========== ==========
========= ========= ========== ==========
NET INCOME APPLICABLE TO COMMON STOCK $ 1,677 $ 1,128 49% $ 5,375 $ 3,684 46%
========= ========= ========== ==========
NET INCOME PER COMMON SHARE:
Basic $ 2.05 $ 1.34 53% $ 6.49 $ 4.35 49%
Diluted $ 1.98 $ 1.31 51% $ 6.27 $ 4.24 48%
</TABLE>
(a) The 1999 fourth quarter includes a net restructuring charge of $48
million reflecting a $75 million charge taken in connection with planned staff
reductions and premises and equipment dispositions resulting from the relocation
of several business functions, and a $100 million charge associated with
restructuring actions undertaken in certain businesses. These charges were
partially offset by the reversal of $127 million of costs primarily related to
occupancy not fully utilized under the $510 million charge taken in 1998. 1998
includes the $510 million charge taken in connection with initiatives to
streamline support functions, and merger-related restructuring costs of $19
million.
NM - Not meaningful
Unaudited
<PAGE>
THE CHASE MANHATTAN CORPORATION
NONINTEREST REVENUE AND NONINTEREST EXPENSE DETAIL
(in millions)
<TABLE>
<CAPTION>
% %
Fourth Quarter Over/(Under) For The Year Over/(Under)
---------------------- -----------------------
--------- --------- --------- ----------
NONINTEREST REVENUE 1999 1998 1998 1999 1998 1998
--------- --------- ---------- --------- ---------- ----------
Fees for Other Financial Services:
<S> <C> <C> <C> <C> <C> <C>
Mortgage Servicing Fees $ 167 $ 43 288% $ 405 $ 192 111%
Service Charges on Deposit Accounts 104 93 12% 393 368 7%
Fees in Lieu of Compensating Balances 91 88 3% 378 344 10%
Commissions on Letters of Credit and Acceptances 78 83 (6%) 285 301 (5%)
Brokerage and Investment Services 62 40 55% 198 142 39%
Insurance Fees (a) 47 42 12% 171 145 18%
Loan Commitment Fees 28 35 (20%) 139 136 2%
Other Fees 142 128 11% 527 465 13%
--------- --------- --------- ----------
========= ========= ========= ==========
Total $ 719 $ 552 30% $ 2,496 $ 2,093 19%
========= ========= ========= ==========
Trading-Related Revenue: (b)
Interest Rate Contracts $ 184 $ 315 (42%) $ 989 $ 607 63%
Foreign Exchange Revenue 191 140 36% 807 936 (14%)
Equities and Commodities 52 32 63% 355 156 128%
Debt Instruments and Other 206 199 4% 731 250 192%
--------- --------- --------- ----------
Total $ 633 $ 686 (8%) $ 2,882 $ 1,949 48%
========= ========= ========= ==========
Other Revenue:
Residential Mortgage Origination/Sales Activities $ 48 $ 115 (58%) $ 323 $ 356 (9%)
Gains on Sales of a Nonstrategic Building and Branches -- -- -- 166 (c) -- NM
All Other Revenue 87 83 5% 342 308 11%
--------- --------- --------- ----------
========= ========= ========= ==========
Total $ 135 $ 198 (32%) $ 831 $ 664 25%
========= ========= ========= ==========
- -----------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Other Expense:
Professional Services $ 209 $ 185 13% $ 719 $ 668 8%
Marketing Expense 103 113 (9%) 459 419 10%
Telecommunications 99 91 9% 383 349 10%
Amortization of Intangibles 78 73 7% 297 261 14%
Travel and Entertainment 63 66 (5%) 226 243 (7%)
Minority Interest (d) 12 14 (14%) 49 50 (2%)
Foreclosed Property Expense 1 3 (67%) 15 5 200%
Special Contribution to the Foundation -- -- -- 100 (e) -- NM
All Other 418 368 14% 1,402 1,292 9%
--------- --------- --------- ----------
========= ========= ========= ==========
Total $ 983 $ 913 8% $ 3,650 $ 3,287 11%
========= ========= ========= ==========
</TABLE>
(a) Insurance amounts exclude certain insurance fees related to credit
cards and mortgage products, which are included in those revenue captions.
(b)Charge-offs for risk management instruments are included in trading revenue.
All prior periods have been restated. Trading-related revenue includes net
interest income attributable to trading activities.
(c) Includes a $95 million gain on the sale of One New York Plaza and a $71
million gain on the sale of branches in Beaumont, Texas.
(d) Includes REIT minority interest of $11 million in each quarter and $44
million in each year.
(e) Represents a $100 million special contribution to The Chase Manhattan
Foundation.
NM - Not meaningful
Unaudited
<PAGE>
THE CHASE MANHATTAN CORPORATION
OPERATING INCOME RECONCILIATION
(in millions, except per share data)
<TABLE>
<CAPTION>
FOURTH QUARTER 1999 FOURTH QUARTER 1998
------------------------------------------- -------------------------------------------
REPORTED CREDIT SPECIAL OPERATING REPORTED CREDIT SPECIAL OPERATING
RESULTS CARD ITEMS BASIS RESULTS CARD ITEMS BASIS
(a) (b) (c) (a) (b) (c)
-------- -------- -------- --------- -------- -------- -------- ---------
EARNINGS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Market-Sensitive Revenue $ 2,380 $ - $ - $ 2,380 $ 1,478 $ - $ - $ 1,478
Less Market-Sensitive Revenue 3,886 240 (62) 4,064 3,582 284 - 3,866
-------- -------- -------- --------- -------- -------- -------- ---------
Total Revenue 6,266 240 (62) 6,444 5,060 284 - 5,344
Noninterest Expense 3,179 - - 3,179 2,873 - - 2,873
-------- -------- -------- --------- -------- -------- -------- ---------
Operating Margin 3,087 240 (62) 3,265 2,187 284 - 2,471
Credit Costs 454 240 - 694 411 284 - 695
-------- -------- -------- --------- -------- -------- -------- ---------
Income Before Restructuring Costs 2,633 - (62) 2,571 1,776 - - 1,776
Restructuring Costs 48 - (48) - - - - -
-------- -------- -------- --------- -------- -------- -------- ---------
Income Before Income Tax Expense 2,585 - (14) 2,571 1,776 - - 1,776
Income Tax Expense 892 - (4) 888 630 - - 630
-------- -------- -------- --------- -------- -------- -------- ---------
-------- -------- -------- --------- -------- -------- ---------
Net Income $ 1,693 $ - $ (10) $ 1,683 $ 1,146 $ - $ - $ 1,146
-------- -------- -------- --------- -------- -------- -------- ---------
NET INCOME PER COMMON SHARE
Basic $ 2.05 $ 2.04 $ 1.34 $ 1.34
Diluted $ 1.98 $ 1.97 $ 1.31 $ 1.31
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR 1999 FOR THE YEAR 1998
------------------------------------------- -------------------------------------------
REPORTED CREDIT SPECIAL OPERATING REPORTED CREDIT SPECIAL OPERATING
RESULTS CARD ITEMS BASIS RESULTS CARD ITEMS BASIS
(a) (b) (c) (a) (b) (c)
-------- -------- -------- --------- -------- -------- -------- ---------
EARNINGS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Market-Sensitive Revenue $ 7,392 $ - $ - $ 7,392 $ 5,027 $ - $ - $ 5,027
Less Market-Sensitive Revenue 14,825 993 (228) 15,590 13,629 1,148 (191) 14,586
-------- -------- -------- --------- -------- -------- -------- ---------
Total Revenue 22,217 993 (228) 22,982 18,656 1,148 (191) 19,613
Noninterest Expense 12,173 - (100) 12,073 10,854 - (37) 10,817
-------- -------- -------- --------- -------- -------- -------- ---------
Operating Margin 10,044 993 (128) 10,909 7,802 1,148 (154) 8,796
Credit Costs 1,621 993 - 2,614 1,343 1,148 - 2,491
-------- -------- -------- --------- -------- -------- -------- ---------
Income Before Restructuring Costs 8,423 - (128) 8,295 6,459 - (154) 6,305
Restructuring Costs 48 - (48) - 529 - (529) -
-------- -------- -------- --------- -------- -------- -------- ---------
Income Before Income Tax Expense 8,375 - (80) 8,295 5,930 - 375 6,305
Income Tax Expense 2,929 - (28) 2,901 2,148 - 141 2,289
-------- -------- -------- --------- -------- -------- -------- ---------
Net Income $ 5,446 $ - $ (52) $ 5,394 $ 3,782 $ - $ 234 $ 4,016
-------- -------- -------- --------- -------- -------- -------- ---------
NET INCOME PER COMMON SHARE
Basic $ 6.49 $ 6.42 $ 4.35 $ 4.63
Diluted $ 6.27 $ 6.21 $ 4.24 $ 4.51
</TABLE>
Note: Charge-offs and provisions for risk management instruments, included
in credit costs prior to 1999, are now netted against trading revenue. All prior
periods have been restated.
(a) Represent results as reported in Chase's financial statements, except
that revenues are categorized between market-sensitive and less market-sensitive
revenues and restructuring costs have been separately displayed.
Market-sensitive revenue includes investment banking fees, trading-related
revenue (including trading-related net interest income), securities gains and
private equity gains.
(b) This column excludes the impact of credit card securitizations.
(c) Includes restructuring costs and special items. The 1999 fourth quarter
results included interest income from prior years' tax refunds of $62 million
and a net restructuring charge of $48 million. The net restructuring charge
reflects a $75 million charge taken in connection with planned staff
reductions and premises and equipment dispositions resulting from the relocation
of several business functions, and a $100 million charge associated with
restructuring actions undertaken in certain businesses. These charges were
partially offset by the reversal of $127 million of costs primarily related to
occupancy not fully utilized under the $510 million charge taken in 1998. Also
included in the 1999 full year results were $166 million in gains from sales of
nonstrategic assets, of which $95 million was from the sale of One New York
Plaza and $71 million was from the sale of branches in Beaumont, Texas, and a
special contribution of $100 million. The 1998 full year results included
interest income from prior years' tax refunds of $191 million, costs incurred
for accelerated vesting of stock-based incentive awards of $37 million, and a
$510 million charge taken in connection with initiatives to streamline support
functions, and merger-related restructuring costs of $19 million.
Unaudited
<PAGE>
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED BALANCE SHEET
(in millions)
<TABLE>
<CAPTION>
%
December 31, Over/(Under)
----------------------------------
1999 1998 1998
-------------- -------------- ---------------
ASSETS
<S> <C> <C> <C>
Cash and Due from Banks $ 16,229 $ 17,068 (5%)
Deposits with Banks 28,076 7,212 289%
Federal Funds Sold and Securities
Purchased Under Resale Agreements 23,823 18,487 29%
Trading Assets:
Debt and Equity Instruments 30,191 24,844 22%
Risk Management Instruments 33,078 32,848 1%
Securities 61,513 64,490 (5%)
Loans (Net of Allowance for Loan Losses of $3,457 in 1999
and $3,552 in 1998) 172,702 169,202 2%
Other Assets 40,493 31,724 28%
-------------- --------------
TOTAL ASSETS $ 406,105 $ 365,875 11%
============== ==============
LIABILITIES
Deposits:
Domestic:
Noninterest-Bearing $ 49,468 $ 47,541 4%
Interest-Bearing 80,132 85,886 (7%)
Foreign:
Noninterest-Bearing 6,061 4,082 48%
Interest-Bearing 106,084 74,928 42%
Total Deposits 241,745 212,437 14%
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 50,148 41,632 20%
Commercial Paper 8,509 7,788 9%
Other Borrowed Funds 5,145 7,239 (29%)
Trading Liabilities 38,573 38,502 --
Accounts Payable, Accrued Expenses and Other Liabilities, Including
the Allowance for Credit Losses of $170 in 1999 and 1998 17,678 15,514 14%
Long-Term Debt 17,602 16,187 9%
Guaranteed Preferred Beneficial Interests in Corporation's
Junior Subordinated Deferrable Interest Debentures 2,538 2,188 16%
-------------- --------------
TOTAL LIABILITIES 381,938 341,487 12%
-------------- --------------
PREFERRED STOCK OF SUBSIDIARY 550 550 --
-------------- --------------
STOCKHOLDERS' EQUITY
Preferred Stock 928 1,028 (10%)
Common Stock 882 882 --
Capital Surplus 9,714 9,836 (1%)
Retained Earnings 17,547 13,544 30%
Accumulated Other Comprehensive Income (Loss) (1,454) 392 NM
Treasury Stock, at Cost (4,000) (1,844) 117%
-------------- --------------
TOTAL STOCKHOLDERS' EQUITY 23,617 23,838 (1%)
-------------- --------------
TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY
AND STOCKHOLDERS' EQUITY $ 406,105 $ 365,875 11%
============== ==============
</TABLE>
NM - Not meaningful
Unaudited
<PAGE>
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
(in millions)
<TABLE>
<CAPTION>
For The Year
----------------------------------
------------ -------------
1999 1998
------------ -------------
<S> <C> <C>
Preferred Stock
Balance at Beginning of Year $ 1,028 $ 1,740
Issuance of Stock - 200
Redemption of Stock (100) (912)
------------ -------------
Balance at End of Year $ 928 $ 1,028
------------ -------------
Common Stock
Balance at Beginning of Year $ 882 $ 441
Issuance of Common Stock for a Two-for-One Stock Split - 441
------------ -------------
------------ -------------
Balance at End of Year $ 882 $ 882
------------ -------------
Capital Surplus
Balance at Beginning of Year $ 9,836 $ 10,360
Issuance of Common Stock for a Two-for-One Stock Split - (441)
Issuance of Common Stock and Options for the
Purchase Accounting Acquisition of H&Q 215 -
Shares Issued and Commitments to Issue Common Stock
for Employee Stock-Based Awards and Related Tax Effects (337) (83)
------------ -------------
Balance at End of Year $ 9,714 $ 9,836
------------ -------------
Retained Earnings
Balance at Beginning of Year $ 13,544 $ 11,086
Net Income 5,446 3,782
Cash Dividends Declared:
Preferred Stock (71) (98)
Common Stock (1,372) (1,226)
------------ -------------
Balance at End of Year $ 17,547 $ 13,544
------------ -------------
Accumulated Other Comprehensive Income (Loss)
Balance at Beginning of Year $ 392 $ 112
Other Comprehensive Income (Loss) (1,846) 280
------------ -------------
Balance at End of Year $(1,454) $ 392
------------ -------------
Treasury Stock, at Cost
Balance at Beginning of Year $(1,844) $(1,997)
Purchase of Treasury Stock (4,349) (1,091)
Reissuance of Treasury Stock 1,981 1,244
Reissuance of Treasury Stock for the Purchase Accounting Acquisition of H&Q 212 -
------------ -------------
Balance at End of Year $(4,000) $(1,844)
------------ -------------
Total Stockholders' Equity $ 23,617 $ 23,838
============ =============
- ------------------------------------------------------------------------------------------------------------------------------
Comprehensive Income
Net Income $ 5,446 $ 3,782
Other Comprehensive Income (Loss) (1,846) 280
------------ -------------
============ =============
Comprehensive Income $ 3,600 $ 4,062
============ =============
</TABLE>
Unaudited
<PAGE>
THE CHASE MANHATTAN CORPORATION
CREDIT RELATED INFORMATION
(in millions)
<TABLE>
<CAPTION>
% %
Credit-Related Assets Over/(Under) Nonperforming Assets Over/(Under)
--------------------------- --------------------------
December 31, 1999 1998 1998 1999 1998 1998
- -------------------------------------------- ------------ ------------ ---------- ------------ ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
CONSUMER LOANS
Domestic Consumer:
1-4 Family Residential Mortgages $ 44,262 $41,831 6% $ 286 $ 313 (9%)
Credit Card - Reported 15,633 14,229 10% 40 (a) -- NM
Credit Card Securitizations (b) 17,939 18,033 (1%) -- -- --
------------ ------------ ------------ -----------
Credit Card - Managed 33,572 32,262 4% 40 -- NM
Auto Financings 18,442 16,456 12% 83 50 66%
Other Consumer 6,902 8,375 (18%) 7 6 17%
------------ ------------ ------------ -----------
Total Domestic Consumer 103,178 98,924 4% 416 369 13%
Total Foreign Consumer 2,800 2,939 (5%) 22 23 (4%)
------------ ------------ ------------ -----------
Total Consumer Loans 105,978 101,863 4% 438 392 12%
------------ ------------ ------------ -----------
COMMERCIAL LOANS
Domestic Commercial:
Commercial and Industrial 52,308 49,706 5% 392 332 18%
Commercial Real Estate 3,636 3,984 (9%) 51 41 24%
------------ ------------ ------------ -----------
Total Domestic Commercial 55,944 53,690 4% 443 373 19%
Total Foreign Commercial 32,176 35,234 (9%) 779 675 15%
------------ ------------ ------------ -----------
Total Commercial Loans 88,120 88,924 (1%) 1,222 1,048 17%
Derivative and FX Contracts 33,611 33,255 1% 34 50 (32%)
------------ ------------ ------------ -----------
Total Commercial Credit-Related 121,731 122,179 -- 1,256 1,098 14%
------------ ------------ ------------ -----------
============ ============
Total Managed Credit-Related $227,709 $224,042 2% 1,694 1,490 14%
============ ============ ------------ -----------
Assets Acquired as Loan Satisfactions 102 116 (12%)
------------ -----------
============ ===========
Total Nonperforming Assets $ 1,796 $ 1,606 12%
============ ===========
</TABLE>
<TABLE>
<CAPTION>
% %
Fourth Quarter Over/(Under) For The Year Over/(Under)
------------------- --------------
------------ ------------ ------------ -----------
NET CHARGE-OFFS 1999 1998 1998 1999 1998 1998
- -------------------------------------------- ------------ ------------ ---------- ------------ ----------- ---------
CONSUMER LOANS
Domestic Consumer:
<S> <C> <C> <C> <C> <C> <C> <C>
1-4 Family Residential Mortgages $ 10 $ 9 11% $ 29 $ 31 (6%)
Credit Card - Reported 187 212 (12%) 828 762 9%
Credit Card Securitizations (b) 240 284 (15%) 993 1,148 (14%)
------------ ------------ ------------ -----------
Credit Card - Managed 427 496 (14%) 1,821 1,910 (5%)
Auto Financings 24 19 26% 81 77 5%
Other Consumer 52 44 18% 196 167 17%
------------ ------------ ------------ -----------
Total Domestic Consumer 513 568 (10%) 2,127 2,185 (3%)
Total Foreign Consumer 10 11 (9%) 37 25 48%
------------ ------------ ------------ -----------
Total Consumer Loans 523 579 (10%) 2,164 2,210 (2%)
------------ ------------ ------------ -----------
COMMERCIAL LOANS
Domestic Commercial:
Commercial and Industrial 107 9 NM 252 (68) NM
Commercial Real Estate (1) (5) NM (14) (14) --
------------ ------------ ------------ -----------
Total Domestic Commercial 106 4 NM 238 (82) NM
Total Foreign Commercial 181 112 62% 324 438 (26%)
------------ ------------ ------------ -----------
Total Commercial Loans 287 116 147% 562 356 58%
------------ ------------ ------------ -----------
Total Managed Net Charge-offs (c) $ 810 $ 695 17% $ 2,726 $ 2,566 6%
============ ============ ============ ===========
</TABLE>
(a) Includes currently performing loans placed on a cash basis because of
concerns as to collectibility.
(b) Represents the portion of Chase's credit card receivables that have been
securitized.
(c) Excludes charge-offs for risk management instruments which are netted
against trading revenues.
NM - Not meaningful
Unaudited
<PAGE>
THE CHASE MANHATTAN CORPORATION
CREDIT RELATED INFORMATION (Continued)
<TABLE>
<CAPTION>
As of or For The As of or For The
Three Months Ended Year Ended
MANAGED CREDIT CARD PORTFOLIO * December 31, December 31,
------------------------- ------------------------
----------- ---------- ---------- -----------
(in millions, except ratios) 1999 1998 1999 1998
- ---------------------------------------------------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Average Credit Card Receivables $33,290 $31,902 $32,707 $31,965
Past Due 90 Days or More and Accruing $ 638 $ 691 $ 638 $ 691
As a Percentage of Average Credit Card Receivables 1.92% 2.17% 1.95% 2.16%
Net Charge-offs $ 436 $ 500 $ 1,852 $ 1,925
As a Percentage of Average Credit Card Receivables 5.24% 6.27% 5.66% 6.02%
* Includes domestic and international credit card activity.
</TABLE>
SELECTED COUNTRY EXPOSURE (a)
(in billions)
<TABLE>
<CAPTION>
At December 31, 1999 At Dec. 31, 1998
-------------------------------------------------------------------------------- -----------------------
Country Country
Gross Net Related Net Related
Local Less Cross- Resale Cross- Resale
Lending- Trading- Country Local Border Agree- Border Agree-
LATIN AMERICA Related (b) Related (c) Assets Funding Exposure (a) ments (a) Exposure ments
- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Brazil $ 0.9 $ 0.2 $ 1.3 $ (1.0) $ 1.4 $ 0.9 $ 2.3 $ 0.9
Argentina 2.1 0.2 0.4 (0.3) 2.4 0.6 2.3 0.5
Mexico 1.6 0.8 0.4 (0.4) 2.4 0.5 1.8 0.4
Chile 0.9 - 0.1 (0.1) 0.9 - 0.9 -
Colombia 0.6 - - - 0.6 - 0.8 -
Venezuela 0.3 - - - 0.3 0.1 0.4 -
All Other Latin America (d) 0.7 0.1 0.8 (0.8) 0.8 - 1.0 -
------------ ---------- -------- ----------- ---------- ---------- ----------- ----------
Total Latin America $ 7.1 $ 1.3 $ 3.0 $ (2.6) $ 8.8 $ 2.1 $ 9.5 $ 1.8
------------ ---------- -------- ----------- ---------- ---------- ----------- ----------
ASIAN IMF COUNTRIES
- -------------------------
South Korea $ 0.6 $ 0.2 $ 0.9 $ (0.3) $ 1.4 $ - $ 2.4 $ -
Indonesia 0.8 0.1 0.1 (0.1) 0.9 - 1.2 -
Thailand 0.1 0.1 0.7 (0.2) 0.7 - 0.9 -
------------ ---------- -------- ----------- ---------- ---------- ----------- ----------
Subtotal 1.5 0.4 1.7 (0.6) 3.0 - 4.5 -
OTHER EMERGING ASIA
- -------------------------
Hong Kong 0.4 0.1 4.5 (4.5) 0.5 - 0.8 -
Singapore 0.8 0.1 0.1 (0.1) 0.9 - 0.8 -
Philippines 0.1 0.1 0.3 (0.1) 0.4 - 0.6 -
Malaysia 0.1 0.1 0.6 (0.1) 0.7 - 0.6 -
China 0.2 0.2 0.1 (0.1) 0.4 - 0.6 -
All Other Asia 0.3 - 0.5 (0.3) 0.5 - 0.5 -
------------ ---------- -------- ----------- ---------- ---------- ----------- ----------
Total Emerging Asia (e) $ 3.4 $ 1.0 $ 7.8 $ (5.8) $ 6.4 $ - $ 8.4 $ -
------------ ---------- -------- ----------- ---------- ---------- ----------- ----------
</TABLE>
(a) Estimated cross-border disclosure is based on the Federal Financial
Institutions Examination Council ("FFIEC") guidelines governing the
determination of cross-border risk. Under FFIEC guidelines, resale agreements
are reported by the country of the issuer of the underlying security. Chase,
however, does not consider the cross-border risk of resale agreements to depend
upon the country of the issuer of the underlying security and, as a result, has
presented these amounts separately in the above table.
(b) Includes loans and accrued interest, interest-bearing deposits with
banks, acceptances, other monetary assets, issued letters of credit and
undrawn commitments to extend credit.
(c) Includes cross-border trading debt and equity instruments and the mark-
to-market exposure of foreign exchange and derivative contracts. The
amounts associated with foreign exchange and derivative contracts are presented
after taking into account the impact of legally enforceable master netting
agreements.
(d) Excludes Bermuda and Cayman Islands.
(e) Excludes Japan, Australia and New Zealand. The net cross-border exposure
for Japan, Australia and New Zealand at December 31, 1999 was $4.9 billion,
$2.0 billion and $0.3 billion, respectively, compared with $5.2 billion,
$1.9 billion and $0.6 billion, respectively, at December 31, 1998. Japan
also had country-related resale agreements of $3.3 billion at December 31,
1999, compared with $1.7 billion at December 31, 1998.
Unaudited
<PAGE>
THE CHASE MANHATTAN CORPORATION
CONDENSED AVERAGE CONSOLIDATED BALANCE SHEET, INTEREST AND RATES
(Taxable-Equivalent Interest and Rates; in millions)
<TABLE>
<CAPTION>
Fourth Quarter 1999 Fourth Quarter 1998
------------------------------------- -------------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Liquid Interest-Earning Assets $ 70,789 $ 1,018 5.71% $ 62,155 $ 1,096 7.00%
Securities 59,977 878 5.81% 64,340 967 5.96%
Loans 175,822 3,452 7.79% 173,119 3,382 7.75%
Total Interest-Earning Assets 306,588 5,348 6.92% 299,614 5,445 7.21%
Noninterest-Earning Assets 81,000 78,827
Total Assets $387,588 $378,441
LIABILITIES
Interest-Bearing Deposits $172,655 1,786 (b) 4.10% $160,386 1,717 4.25%
Short-Term and Long-Term Debt 99,451 1,330 5.31% 92,633 1,564 6.70%
Total Interest-Bearing Liabilities 272,106 3,116 4.54% 253,019 3,281 5.14%
Noninterest-Bearing Deposits 50,710 48,628
Other Noninterest-Bearing Liabilities 41,377 52,914
Total Liabilities 364,193 354,561
PREFERRED STOCK OF SUBSIDIARY 550 550
STOCKHOLDERS' EQUITY
Preferred Stock 928 1,028
Common Stockholders' Equity 21,917 22,302
Total Stockholders' Equity 22,845 23,330
Total Liabilities, Preferred Stock of Subsidiary
and Stockholders' Equity $387,588 $378,441
INTEREST RATE SPREAD 2.38% 2.07%
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS $ 2,232 2.89% $ 2,164 2.87%
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS (a) $ 2,567 3.14% (b) $ 2,531 3.16%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
For The Year 1999 For The Year 1998
------------------------------------- -------------------------------------
Average Average
Balance Interest Rate Balance Interest Rate
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Liquid Interest-Earning Assets $ 64,212 $ 3,908 6.09% $ 68,910 $ 5,284 7.67%
Securities 56,216 3,233 5.75% 58,484 3,635 6.22%
Loans 173,770 13,118 7.55% 169,386 13,394 7.91%
Total Interest-Earning Assets 294,198 20,259 6.89% 296,780 22,313 7.52%
Noninterest-Earning Assets 75,949 76,431
Total Assets $370,147 $373,211
LIABILITIES
Interest-Bearing Deposits $163,795 6,592 (b) 4.02% $153,545 6,840 (b) 4.45%
Short-Term and Long-Term Debt 92,179 4,901 5.32% 98,368 6,883 7.00%
Total Interest-Bearing Liabilities 255,974 11,493 4.49% 251,913 13,723 5.45%
Noninterest-Bearing Deposits 48,752 46,169
Other Noninterest-Bearing Liabilities 41,892 51,971
Total Liabilities 346,618 350,053
PREFERRED STOCK OF SUBSIDIARY 550 550
STOCKHOLDERS' EQUITY
Preferred Stock 1,002 1,280
Common Stockholders' Equity 21,977 21,328
Total Stockholders' Equity 22,979 22,608
Total Liabilities, Preferred Stock of Subsidiary
and Stockholders' Equity $370,147 $373,211
INTEREST RATE SPREAD 2.40% 2.07%
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS $ 8,766 2.98% $ 8,590 2.89%
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS (a) $ 10,101 3.24% (b) $ 10,050 3.19%(b)
</TABLE>
(a) Excludes the impact of the credit card securitizations.
(b) Includes interest income of $62 million recognized in the 1999 fourth
quarter and $191 million recognized in 1998 for prior years' tax refunds.
Excluding these amounts, the net yield on interest-earning assets would be
3.07%, 3.22% and 3.13% for the 1999 fourth quarter, 1999 full year and
1998 full year,respectively.
Unaudited
<PAGE>
THE CHASE MANHATTAN CORPORATION
Chase Capital Partners
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Chase Capital Partners Investment Portfolio at December 31, 1999
($ in millions) Carrying
Value Cost
----------------------------------
<S> <C> <C>
Total Public Securities (101 securities) $ 2,624 $ 696
Total Non-Public Direct Investments (484 investments) 4,481 4,344
Total Non-Public Fund Investments (282 funds) 1,844 1,867
---------------- --------------
================ ==============
Total Investment Portfolio $ 8,949 $ 6,907
================ ==============
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Public Securities Investments at December 31, 1999
Quoted
($ in millions) Public
Symbol Shares (MM) Value Cost
---------------------------------------------------------------
<S> <C> <C> <C> <C>
TRITON PCS HOLDING, INC. TPCS 11.6 $ 546 $ 67
TELECORP PCS TLCP 11.6 491 60
STARMEDIA NETWORK, INC. STRM 11.0 442 28
IXL ENTERPRISES, INC. IIXL 7.4 411 29
DIGITAL ISLAND ISLD 2.3 223 12
COBALT NETWORKS, INC. COBT 1.9 208 5
AMERICAN TOWER SYSTEMS AMT 6.2 188 17
SEAT - PATINE GIALLE SPA SPG IM * 185 12
FISHER SCIENTIFIC FSH 4.1 146 39
ITXC CORP. ITXC 3.8 135 6
---------------- --------------
Top Ten Public Securities $ 2,975 $ 275
Other Securities (91 securities) 1,003 421
---------------- --------------
================ ==============
Total Public Securities (carrying value $2,624) $ 3,978 $ 696
================ ==============
* - owned through a limited partnership
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
Policy:
Public securities held by Chase Capital Partners are marked-to-market at
the quoted public value less liquidity discounts, with the resulting unrealized
gains/losses included in the income statement. Chase's valuation policy for
public securities incorporates the use of these liquidity discounts and price
averaging methodologies in certain circumstances to take into account the fact
that Chase can not immediately realize such public quoted values due to the
numerous regulatory, corporate and contractual sales restrictions. Non-Public
investments are carried at cost, with the exception of holdings in which a
subsequent investment by an unaffiliated party indicates a valuation in excess
of cost and holdings for which evidence of an other-than-temporary decline in
value exists.
