Management’s discussion and analysis J. P.  Morgan Chase & Co.  Overview J. P.  Morgan Chase & Co.  is a leading global financial services firm with assets of $771 billion and operations in more than 50 countries.
The Firm serves more than 30 million consumers nationwide through its retail businesses, and many of the world's most prominent corporate, institutional and government clients through its global wholesale businesses.
Financial performance of JPMorgan Chase
## Table 0 ##
In 2003, global growth strengthened relative to the prior two years.
The U. S.  economy improved significantly, supported by diminishing geopolitical uncertainties, new tax relief, strong profit growth, low interest rates and a rising stock market.
Productivity at U. S.  businesses continued to grow at an extraordinary pace, as a result of ongoing investment in information technologies.
Profit margins rose to levels not seen in a long time.
New hiring remained tepid, but signs of an improving job market emerged late in the year.
Inflation fell to the lowest level in more than 40 years, and the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) declared that its long-run goal of price stability had been achieved.
Against this backdrop, J. P.  Morgan Chase & Co.  (“JPMorgan Chase” or the “Firm”) reported 2003 Net income of $6.7 billion, compared with Net income of $1.7 billion in 2002.
All five of the Firm’s lines of business benefited from the improved economic conditions, with each reporting increased revenue over 2002.
In particular, the low–interest rate environment drove robust fixed income markets and an unprecedented mortgage refinancing boom, resulting in record earnings in the Investment Bank and Chase Financial Services.
Total revenue for 2003 was $33.3 billion, up 12% from 2002.
The Investment Bank’s revenue increased by approximately $1.9 billion from 2002, and Chase Financial Services’ revenue was $14.6 billion in 2003, another record year Total Noninterest expense was $21.7 billion, down 5% from the prior year.
In 2002, the Firm recorded $1.3 billion of charges, principally for Enron-related surety litigation and the establishment of litigation reserves; and $1.2 billion for Merger and restructuring costs related to programs announced prior to January 1, 2002.
Excluding these costs, expenses rose by 7% in 2003, reflecting higher performance-related incentives; increased costs related to stock-based compensation and pension and other postretirement expenses; and higher occupancy expenses.
The Firm began expensing stock options in 2003.
Restructuring costs associated with initiatives announced after January 1, 2002, were recorded in their relevant expense categories and totaled $630 million in 2003, down 29% from 2002.
The 2003 Provision for credit losses of $1.5 billion was down $2.8 billion, or 64%, from 2002.
The provision was lower than total net charge-offs of $2.3 billion, reflecting significant improvement in the quality of the commercial loan portfolio.
Commercial nonperforming assets and criticized exposure levels declined 42% and 47%, respectively, from December 31, 2002.
Consumer credit quality remained stable.
Earnings per diluted share (“EPS”) for the year were $3.24, an increase of 305% over the EPS of $0.80 reported in 2002.
Results in 2002 were provided on both a reported basis and an operating basis, which excluded Merger and restructuring costs and special items.
Operating EPS in 2002 was $1.66.
See page 28 of this Annual Report for a reconciliation between reported and operating EPS.
Summary of segment results The Firm’s wholesale businesses are known globally as “JPMorgan,” and its national consumer and middle market businesses are known as “Chase.
” The wholesale businesses comprise four segments: the Investment Bank (“IB”), Treasury & Securities Services (“TSS”), Investment Management & Private Banking (“IMPB”) and JPMorgan Partners (“JPMP”).
IB provides a full range of investment banking and commercial banking products and services, including advising on corporate strategy and structure, capital raising, risk management, and market-making in cash securities and derivative instruments in all major capital markets.
The three businesses within TSS provide debt servicing, securities custody and related functions, and treasury and cash management services to corporations, financial institutions and governments.
The IMPB business provides investment management services to institutional investors, high net worth individuals and retail customers and also provides personalized advice and solutions to wealthy individuals and families.
JPMP, the Firm’s private equity business, provides equity and mezzanine capital financing to private companies.
The Firm’s national consumer and middle market businesses, which provide lending and full-service banking to consumers and small and middle market businesses, comprise Chase Financial Services (“CFS”).
## Table 1 ##
Corporate credit allocation In 2003, TSS was assigned a corporate credit allocation of pretax earnings and the associated capital related to certain credit exposures managed within IB’s credit portfolio on behalf of clients shared with TSS.
Prior periods have been revised to reflect this allocation.
For 2003, the impact to TSS of this change increased pre-tax operating results by $36 million and average allocated capital by $712 million, and it decreased SVA by $65 million.
Pre-tax operating results were $46 million lower than in 2002, reflecting lower loan volumes and higher related expenses, slightly offset by a decrease in credit costs.
Business outlook TSS revenue in 2004 is expected to benefit from improved global equity markets and from two recent acquisitions: the November 2003 acquisition of the Bank One corporate trust portfolio, and the January 2004 acquisition of Citigroup’s Electronic Funds Services business.
TSS also expects higher costs as it integrates these acquisitions and continues strategic investments to support business expansion.
(a) Includes a portion of the $41 million gain on sale of a nonstrategic business in 2003: $1 million in Institutional Trust Services and $40 million in Other.
(b) Includes the elimination of revenues related to shared activities with Chase Middle Market, and a $50 million gain on sale of a non-U.
S.  securities clearing firm in 2002.
Management’s discussion and analysis J. P.  Morgan Chase & Co.  Capital and Liquidity management Capital management JPMorgan Chase’s capital management framework helps to optimize the use of capital by: ?
Determining the amount of capital commensurate with: - internal assessments of risk as estimated by the Firm’s economic capital allocation model - the Firm’s goal to limit losses, even under stress conditions - targeted regulatory ratios and credit ratings - the Firm’s liquidity management strategy.  ?
Directing capital investment to activities with the most favorable risk-adjusted returns.
Available versus required capital
## Table 2 ##
Economic risk capital: JPMorgan Chase assesses capital adequacy utilizing internal risk assessment methodologies.
The Firm assigns economic capital based primarily on five risk factors: credit risk, market risk, operational risk and business risk for each business, and private equity risk, principally for JPMP.
The methodologies quantify these risks and assign capital accordingly.
These methodologies are discussed in the risk management sections of this Annual Report.
A review of the Firm’s risk and capital measurement methodologies was completed in 2003, resulting in the reallocation of capital among the risk categories and certain business segments.
The new capital measurement methodologies did not result in a significant change in the total capital allocated to the business segments as a whole.
Prior periods have been adjusted to reflect the revised capital measurement methodologies.
For a further discussion of these new methodologies, see Capital allocation for credit risk, operational risk and business risk, and private equity risk on pages 52, 73 and 74, respectively, of this Annual Report.
Internal capital allocation methodologies may change in the future to reflect refinements of economic capital methodologies.
Capital also is assessed against business units for certain nonrisk factors.
Businesses are assessed capital equal to 100% of any goodwill and 50% for certain other intangibles generated through acquisitions.
Additionally, JPMorgan Chase assesses an “asset capital tax” against managed assets and some off–balance sheet instruments.
These assessments recognize that certain minimum regulatory capital ratios must be maintained by the Firm.
JPMorgan Chase also estimates the portfolio effect on required economic capital based on correlations of risk across risk categories.
This estimated diversification benefit leads to a reduction in required economic capital for the Firm.
The total required economic capital for JPMorgan Chase as determined by its models and after considering the Firm’s estimated diversification benefits is then compared with available common stockholders’ equity to evaluate overall capital utilization.
The Firm’s policy is to maintain an appropriate level of excess capital to provide for growth and additional protection against losses.
The Firm’s capital in excess of that which is internally required as of December 31, 2003, increased by $2.7 billion over December 31, 2002.
The change was primarily due to an increase in average common stockholders’ equity of $1.6 billion and to a $1.3 billion reduction in average capital allocated to business activities, principally in relation to credit risk and private equity risk.
Credit risk capital decreased by $0.9 billion from the prior year, primarily due to a reduction in commercial exposures, improvement in the credit quality of the commercial portfolio and an increase in hedging of commercial exposures using single-name credit derivatives.
Private equity risk decreased primarily as a result of the reduction in JPMP’s private equity portfolio.
Regulatory capital: JPMorgan Chase’s primary federal banking regulator, the Federal Reserve Board, establishes capital requirements, including well-capitalized standards and leverage ratios, for the consolidated financial holding company and its statechartered banks, including JPMorgan Chase Bank.
The Office of the Comptroller of the Currency establishes similar capital requirements and standards for the Firm’s national bank subsidiaries, including Chase Manhattan Bank USA, N. A.
As of December 31, 2003, the financial holding company and its banking subsidiaries maintained capital levels well in excess of the minimum capital requirements.
At December 31, 2003, the Tier 1 and Total capital ratios were 8.5% and 11.8%, respectively, and the Tier 1 leverage ratio was 5.6%.
The Capital Committee reviews the Firm’s capital levels and policies regularly in light of changing economic conditions and business needs.
At December 31, 2003, Total capital of JPMorgan Chase (the sum of Tier 1 and Tier 2 capital) was $59.8 billion, an increase of $5.3 billion from December 31, 2002.
This increase reflected a $5.6 billion increase in Tier 1 capital, primarily driven by a $3.8 billion increase in retained earnings (net income less common and preferred dividends) generated during the period, $1.1 billion in Tier 1 trust preferred net issuance and $1.3 billion in net stock issuances related to employee stock-based benefit plans.
This increase was partially offset by a higher deduction for goodwill and nonqualifying
Off–balance sheet arrangements and contractual cash obligations Special-purpose entities Special-purpose entities (“SPEs”), special-purpose vehicles (“SPVs”), or variable-interest entities (“VIEs”), are an important part of the financial markets, providing market liquidity by facilitating investors’ access to specific portfolios of assets and risks.
SPEs are not operating entities; typically they are established for a single, discrete purpose, have a limited life and have no employees.
The basic SPE structure involves a company selling assets to the SPE.
The SPE funds the asset purchase by selling securities to investors.
To insulate investors from creditors of other entities, including the seller of the assets, SPEs are often structured to be bankruptcy-remote.
SPEs are critical to the functioning of many investor markets, including, for example, the market for mortgage-backed securities, other asset-backed securities and commercial paper.
JPMorgan Chase is involved with SPEs in three broad categories of transactions: loan securitizations (through “qualifying” SPEs), multi-seller conduits, and client intermediation.
Capital is held, as appropriate, against all SPE-related transactions and related exposures such as derivative transactions and lending-related commitments.
The Firm has no commitments to issue its own stock to support any SPE transaction, and its policies require that transactions with SPEs be conducted at arm’s length and reflect market pricing.
Consistent with this policy, no JPMorgan Chase employee is permitted to invest in SPEs with which the Firm is involved where such investment would violate the Firm’s Worldwide Rules of Conduct.
These rules prohibit employees from selfdealing and prohibit employees from acting on behalf of the Firm in transactions with which they or their family have any significant financial interest.
For certain liquidity commitments to SPEs, the Firm could be required to provide funding if the credit rating of JPMorgan Chase Bank were downgraded below specific levels, primarily P-1, A-1 and F1 for Moody’s, Standard & Poor’s and Fitch, respectively.
The amount of these liquidity commitments was $34.0 billion at December 31, 2003.
If JPMorgan Chase Bank were required to provide funding under these commitments, the Firm could be replaced as liquidity provider.
Additionally, with respect to the multi-seller conduits and structured commercial loan vehicles for which JPMorgan Chase Bank has extended liquidity commitments, the Bank could facilitate the sale or refinancing of the assets in the SPE in order to provide liquidity.
Of these liquidity commitments to SPEs, $27.7 billion is included in the Firm’s total Other unfunded commitments to extend credit included in the table on the following page.
As a result of the consolidation of multi-seller conduits in accordance with FIN 46, $6.3 billion of these commitments are excluded from the table, as the underlying assets of the SPE have been included on the Firm’s Consolidated balance sheet.
The following table summarizes certain revenue information related to VIEs with which the Firm has significant involvement, and qualifying SPEs:
## Table 3 ##
The revenue reported in the table above represents primarily servicing fee income.
The Firm also has exposure to certain VIE vehicles arising from derivative transactions with VIEs; these transactions are recorded at fair value on the Firm’s Consolidated balance sheet with changes in fair value (i. e. , mark-to-market gains and losses) recorded in Trading revenue.
Such MTM gains and losses are not included in the revenue amounts reported in the table above.
For a further discussion of SPEs and the Firm’s accounting for SPEs, see Note 1 on pages 86–87, Note 13 on pages 100–103, and Note 14 on pages 103–106 of this Annual Report.
Contractual cash obligations In the normal course of business, the Firm enters into various contractual obligations that may require future cash payments.
Contractual obligations at December 31, 2003, include Long-term debt, trust preferred capital securities, operating leases, contractual purchases and capital expenditures and certain Other liabilities.
For a further discussion regarding Long-term debt and trust preferred capital securities, see Note 18 on pages 109–111 of this Annual Report.
For a further discussion regarding operating leases, see Note 27 on page 115 of this Annual Report.
The accompanying table summarizes JPMorgan Chase’s off– balance sheet lending-related financial instruments and significant contractual cash obligations, by remaining maturity, at December 31, 2003.
Contractual purchases include commitments for future cash expenditures, primarily for services and contracts involving certain forward purchases of securities and commodities.
Capital expenditures primarily represent future cash payments for real estate–related obligations and equipment.
Contractual purchases and capital expenditures at December 31, 2003, reflect the minimum contractual obligation under legally enforceable contracts with contract terms that are both fixed and determinable.
Excluded from the following table are a number of obligations to be settled in cash, primarily in under one year.
These obligations are reflected on the Firm’s Consolidated balance sheet and include Deposits; Federal funds purchased and securities sold under repurchase agreements; Other borrowed funds; purchases of Debt and equity instruments that settle within standard market timeframes (e. g.  regular-way); Derivative payables that do not require physical delivery of the underlying instrument; and certain purchases of instruments that resulted in settlement failures.
Consolidated statement of cash flows J. P.  Morgan Chase & Co
## Table 4 ##
The Notes to consolidated financial statements are an integral part of these statements

Tables referenced above, in order (Table 0 first):
<table><tr><td>(in millions, except per share and ratio data)</td><td>2003</td><td>2002</td><td>Change</td></tr><tr><td>Revenue</td><td>$33,256</td><td>$29,614</td><td>12%</td></tr><tr><td>Noninterest expense</td><td>21,688</td><td>22,764</td><td>-5</td></tr><tr><td>Provision for credit losses</td><td>1,540</td><td>4,331</td><td>-64</td></tr><tr><td>Net income</td><td>6,719</td><td>1,663</td><td>304</td></tr><tr><td>Net income per share – diluted</td><td>3.24</td><td>0.80</td><td>305</td></tr><tr><td>Average common equity</td><td>42,988</td><td>41,368</td><td>4</td></tr><tr><td>Return on average common equity (“ROCE”)</td><td>16%</td><td>4%</td><td>1,200bp</td></tr><tr><td>Tier 1 capital ratio</td><td>8.5%</td><td>8.2%</td><td>30bp</td></tr><tr><td>Total capital ratio</td><td>11.8</td><td>12.0</td><td>-20</td></tr><tr><td>Tier 1 leverage ratio</td><td>5.6</td><td>5.1</td><td>50</td></tr></table>
<table><tr><td>Year ended December 31,</td><td>Operating Revenue</td></tr><tr><td>(in millions)</td><td>2003</td><td>2002</td><td>Change</td></tr><tr><td>Treasury Services</td><td>$1,927</td><td>$1,818</td><td>6%</td></tr><tr><td>Investor Services</td><td>1,449</td><td>1,513</td><td>-4</td></tr><tr><td>Institutional Trust Services<sup>(a)</sup></td><td>928</td><td>864</td><td>7</td></tr><tr><td>Other<sup>(a)(b)</sup></td><td>-312</td><td>-303</td><td>-3</td></tr><tr><td>Total Treasury & Securities Services</td><td>$3,992</td><td>$3,892</td><td>3%</td></tr></table>
<table><tr><td></td><td colspan="2">Yearly Averages</td></tr><tr><td>(in billions)</td><td>2003</td><td>2002</td></tr><tr><td> Common stockholders’ equity</td><td>$43.0</td><td>$41.4</td></tr><tr><td>Economic risk capital:</td><td></td><td></td></tr><tr><td>Credit risk</td><td>13.1</td><td>14.0</td></tr><tr><td>Market risk</td><td>4.5</td><td>4.7</td></tr><tr><td>Operational risk</td><td>3.5</td><td>3.5</td></tr><tr><td>Business risk</td><td>1.7</td><td>1.8</td></tr><tr><td>Private equity risk</td><td>5.4</td><td>5.8</td></tr><tr><td>Economic risk capital</td><td>28.2</td><td>29.8</td></tr><tr><td>Goodwill / Intangibles</td><td>8.9</td><td>8.8</td></tr><tr><td>Asset capital tax</td><td>4.1</td><td>3.9</td></tr><tr><td>Capital against nonrisk factors</td><td>13.0</td><td>12.7</td></tr><tr><td>Total capital allocated to business activities</td><td>41.2</td><td>42.5</td></tr><tr><td>Diversification effect</td><td>-5.1</td><td>-5.3</td></tr><tr><td> Total required internal capital</td><td>36.1</td><td>37.2</td></tr><tr><td> Firm capital in excess of required capital</td><td>$6.9</td><td>$4.2</td></tr></table>
<table><tr><td>Year ended December 31, 2003</td><td>“Qualifying”</td></tr><tr><td>(in millions)</td><td>VIEs</td><td><sup>(a)</sup></td><td>SPEs</td><td>Total</td></tr><tr><td>Revenue</td><td>$79</td><td></td><td>$979</td><td>$1,058</td></tr></table>
<table><tr><td colspan="2">Year ended December 31, (in millions)</td><td>2003</td><td>2002</td><td>2001</td></tr><tr><td colspan="2"> Operating activities</td><td></td><td></td><td></td></tr><tr><td colspan="2">Net income</td><td>$6,719</td><td>$1,663</td><td>$1,694</td></tr><tr><td colspan="2">Adjustments to reconcile net income to net cash provided by (used in)operating activities:</td><td></td><td></td><td></td></tr><tr><td colspan="2">Provision for credit losses</td><td>1,540</td><td>4,331</td><td>3,182</td></tr><tr><td colspan="2">Surety settlement and litigation reserve</td><td>100</td><td>1,300</td><td>—</td></tr><tr><td colspan="2">Depreciation and amortization</td><td>3,101</td><td>2,979</td><td>2,891</td></tr><tr><td colspan="2">Deferred tax provision (benefit)</td><td>1,428</td><td>1,636</td><td>-638</td></tr><tr><td colspan="2">Private equity unrealized (gains) losses</td><td>-77</td><td>641</td><td>1,884</td></tr><tr><td colspan="2">Net change in:</td><td></td><td></td><td></td></tr><tr><td colspan="2">Trading assets</td><td>-2,671</td><td>-58,183</td><td>26,217</td></tr><tr><td colspan="2">Securities borrowed</td><td>-7,691</td><td>2,437</td><td>-4,209</td></tr><tr><td colspan="2">Accrued interest and accounts receivable</td><td>1,809</td><td>677</td><td>5,819</td></tr><tr><td colspan="2">Other assets</td><td>-9,916</td><td>6,182</td><td>-26,756</td></tr><tr><td colspan="2">Trading liabilities</td><td>15,769</td><td>25,402</td><td>-20,143</td></tr><tr><td colspan="2">Accounts payable, accrued expenses and other liabilities</td><td>5,873</td><td>-12,964</td><td>7,472</td></tr><tr><td colspan="2">Other, net</td><td>-1,383</td><td>-1,235</td><td>-520</td></tr><tr><td colspan="2">Net cash provided by (used in) operating activities</td><td>14,601</td><td>-25,134</td><td>-3,107</td></tr><tr><td colspan="2"> Investing activities</td><td></td><td></td><td></td></tr><tr><td colspan="2">Net change in:</td><td></td><td></td><td></td></tr><tr><td colspan="2">Deposits with banks</td><td>-1,233</td><td>3,801</td><td>-4,410</td></tr><tr><td colspan="2">Federal funds sold and securities purchased under resale agreements</td><td>-11,059</td><td>-2,082</td><td>5,747</td></tr><tr><td colspan="2">Loans due to sales</td><td>138,881</td><td>72,742</td><td>47,687</td></tr><tr><td colspan="2">Loans due to securitizations</td><td>31,989</td><td>24,262</td><td>21,888</td></tr><tr><td colspan="2">Other loans, net</td><td>-171,779</td><td>-98,695</td><td>-72,149</td></tr><tr><td colspan="2">Other, net</td><td>1,541</td><td>-3,398</td><td>3,431</td></tr><tr><td>Held-to-maturity securities:</td><td>Proceeds</td><td>221</td><td>85</td><td>113</td></tr><tr><td></td><td>Purchases</td><td>—</td><td>-40</td><td>-2</td></tr><tr><td>Available-for-sale securities:</td><td>Proceeds from maturities</td><td>10,548</td><td>5,094</td><td>7,980</td></tr><tr><td></td><td>Proceeds from sales</td><td>315,738</td><td>219,385</td><td>186,434</td></tr><tr><td></td><td>Purchases</td><td>-301,854</td><td>-244,547</td><td>-182,920</td></tr><tr><td colspan="2">Cash used in acquisitions</td><td>-669</td><td>-72</td><td>-1,677</td></tr><tr><td colspan="2">Proceeds from divestitures of nonstrategic businesses and assets</td><td>94</td><td>121</td><td>196</td></tr><tr><td colspan="2">Net cash provided by (used in) investing activities</td><td>12,418</td><td>-23,344</td><td>12,318</td></tr><tr><td colspan="2"> Financing activities</td><td></td><td></td><td></td></tr><tr><td colspan="2">Net change in:</td><td></td><td></td><td></td></tr><tr><td colspan="2">U.S. deposits</td><td>14,602</td><td>9,985</td><td>29,119</td></tr><tr><td colspan="2">Non-U.S. deposits</td><td>7,249</td><td>1,118</td><td>-14,834</td></tr><tr><td colspan="2">Federal funds purchased and securities sold under repurchase agreements</td><td>-56,017</td><td>41,038</td><td>-3,293</td></tr><tr><td colspan="2">Commercial paper and other borrowed funds</td><td>555</td><td>-4,675</td><td>-15,346</td></tr><tr><td colspan="2">Other, net</td><td>133</td><td>—</td><td>-91</td></tr><tr><td colspan="2">Proceeds from the issuance of long-term debt and capital securities</td><td>17,195</td><td>11,971</td><td>8,986</td></tr><tr><td colspan="2">Repayments of long-term debt and capital securities</td><td>-8,316</td><td>-12,185</td><td>-12,574</td></tr><tr><td colspan="2">Proceeds from the net issuance of stock and stock-related awards</td><td>1,213</td><td>725</td><td>1,429</td></tr><tr><td colspan="2">Redemption of preferred stock</td><td>—</td><td>—</td><td>-511</td></tr><tr><td colspan="2">Redemption of preferred stock of subsidiary</td><td>—</td><td>-550</td><td>—</td></tr><tr><td colspan="2">Treasury stock purchased</td><td>—</td><td>—</td><td>-871</td></tr><tr><td colspan="2">Cash dividends paid</td><td>-2,865</td><td>-2,784</td><td>-2,697</td></tr><tr><td colspan="2">Net cash (used in) provided by financing activities</td><td>-26,251</td><td>44,643</td><td>-10,683</td></tr><tr><td colspan="2">Effect of exchange rate changes on cash and due from banks</td><td>282</td><td>453</td><td>100</td></tr><tr><td colspan="2">Net increase (decrease) in cash and due from banks</td><td>1,050</td><td>-3,382</td><td>-1,372</td></tr><tr><td colspan="2">Cash and due from banks at the beginning of the year</td><td>19,218</td><td>22,600</td><td>23,972</td></tr><tr><td colspan="2">Cash and due from banks at the end of the year</td><td>$20,268</td><td>$19,218</td><td>$22,600</td></tr><tr><td colspan="2">Cash interest paid</td><td>$10,976</td><td>$13,534</td><td>$22,987</td></tr><tr><td colspan="2">Cash income taxes paid</td><td>$1,337</td><td>$1,253</td><td>$479</td></tr></table>

Question: What's the total amount of the Provision for credit losses in the years where Net income greater than 6000? (in million)
Answer: 1540