JP Morgan Chase 2008 Annual Report Download - page 135

JPMorgan Chase & Co./ 2008 Annual Report 133
Consolidated statements of cash flows
Year ended December 31, (in millions) 2008 2007 2006
Operating activities
Net income $ 5,605 $ 15,365 $ 14,444
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Provision for credit losses 20,979 6,864 3,270
Depreciation and amortization 3,143 2,427 2,149
Amortization of intangibles 1,263 1,394 1,428
Deferred tax (benefit) expense (2,637) 1,307 (1,810)
Investment securities (gains) losses (1,560) (164) 543
Proceeds on sale of investment (1,540) ——
Gains on disposition of businesses (199) — (1,136)
Stock-based compensation 2,637 2,025 2,368
Originations and purchases of loans held-for-sale (34,902) (116,471) (178,355)
Proceeds from sales, securitizations and paydowns of loans held-for-sale 38,036 107,350 173,448
Net change in:
Trading assets (12,787) (121,240) (61,664)
Securities borrowed 15,408 (10,496) 916
Accrued interest and accounts receivable 10,221 (1,932) (1,170)
Other assets (33,629) (21,628) (7,193)
Trading liabilities 24,061 12,681 (4,521)
Accounts payable and other liabilities 1,012 4,284 7,815
Other operating adjustments (12,013) 7,674 (111)
Net cash provided by (used in) operating activities 23,098 (110,560) (49,579)
Investing activities
Net change in:
Deposits with banks (118,929) 2,081 8,168
Federal funds sold and securities purchased under resale agreements (44,597) (29,814) (6,939)
Held-to-maturity securities:
Proceeds 10 14 19
Available-for-sale securities:
Proceeds from maturities 44,414 31,143 24,909
Proceeds from sales 96,806 98,450 123,750
Purchases (248,599) (122,507) (201,530)
Proceeds from sales and securitizations of loans held-for-investment 27,531 34,925 20,809
Other changes in loans, net (59,123) (83,437) (70,837)
Net cash received (used) in business acquisitions or dispositions 2,128 (70) 185
Proceeds from assets sale to the FRBNY 28,850 ——
Net purchases of asset-backed commercial paper guaranteed by the FRBB (11,228) ——
All other investing activities, net (3,609) (3,903) 1,839
Net cash used in investing activities (286,346) (73,118) (99,627)
Financing activities
Net change in:
Deposits 177,331 113,512 82,105
Federal funds purchased and securities loaned or sold under repurchase agreements 15,250 (7,833) 36,248
Commercial paper and other borrowed funds 9,186 41,412 12,657
Proceeds from the issuance of long-term debt and capital debt securities 72,407 95,141 56,721
Repayments of long-term debt and capital debt securities (62,691) (49,410) (34,267)
Excess tax benefits related to stock-based compensation 148 365 302
Proceeds from issuance of common stock 11,969 1,467 1,659
Proceeds from issuance of preferred stock and warrant to the U.S. Treasury 25,000 ——
Proceeds from issuance of preferred stock 7,746 ——
Redemption of preferred stock —— (139)
Repurchases of treasury stock —(8,178) (3,938)
Cash dividends paid (5,911) (5,051) (4,846)
All other financing activities, net 71 1,561 6,247
Net cash provided by financing activities 250,506 182,986 152,749
Effect of exchange rate changes on cash and due from banks (507) 424 199
Net (decrease) increase in cash and due from banks (13,249) (268) 3,742
Cash and due from banks at the beginning of the year 40,144 40,412 36,670
Cash and due from banks at the end of the year $ 26,895 $ 40,144 $ 40,412
Cash interest paid $ 37,267 $ 43,472 $ 36,415
Cash income taxes paid 2,280 7,472 5,563
Note: In 2008, the fair values of noncash assets acquired and liabilities assumed in the merger with Bear Stearns were $288.2 billion and $287.7 billion, respectively; approximately 26 mil-
lion shares of common stock, valued at approximately $1.2 billion, were issued in connection with the Bear Stearns merger. Also, in 2008 the fair values of noncash assets acquired and
liabilities assumed in the Washington Mutual transaction were $260.0 billion and $259.8 billion, respectively. In 2006, the Firm exchanged selected corporate trust businesses for The
Bank of New York’s consumer, business banking and middle-market banking businesses. The fair values of the noncash assets exchanged were $2.15 billion.
The Notes to Consolidated Financial Statements are an integral part of these statements.