JP Morgan Chase 2010 Annual Report Download - page 53

JPMorgan Chase & Co./2010 Annual Report
53
(f) Share prices shown for JPMorgan Chase’s common stock are from the New York Stock Exchange. JPMorgan Chase’s common stock is also listed and traded on the London Stock
Exchange and the Tokyo Stock Exchange.
(g) Effective January 1, 2010, the Firm adopted accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of variable interest entities
(“VIEs”). Upon adoption of the guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, Firm-administered multi-seller conduits and certain other
consumer loan securitization entities, primarily mortgage-related, adding $87.7 billion and $92.2 billion of assets and liabilities, respectively, and decreasing stockholders’ equity
and the Tier 1 capital ratio by $4.5 billion and 34 basis points, respectively. The reduction to stockholders’ equity was driven by the establishment of an allowance for loan losses of
$7.5 billion (pretax) primarily related to receivables held in credit card securitization trusts that were consolidated at the adoption date.
(h) The Firm uses Tier 1 common capital (“Tier 1 common”) along with the other capital measures to assess and monitor its capital position. The Tier 1 common capital ratio (“Tier 1
common ratio”) is Tier 1 common divided by risk-weighted assets. For further discussion, see Regulatory capital on pages 102–104 of this Annual Report.
FIVE-YEAR STOCK PERFORMANCE
The following table and graph compare the five-year cumulative
total return for JPMorgan Chase & Co. (“JPMorgan Chase” or the
“Firm”) common stock with the cumulative return of the S&P 500
Stock Index and the S&P Financial Index. The S&P 500 Index is a
commonly referenced U.S. equity benchmark consisting of leading
companies from different economic sectors. The S&P Financial
Index is an index of 81 financial companies, all of which are within
the S&P 500. The Firm is a component of both industry indices.
The following table and graph assume simultaneous investments
of $100 on December 31, 2005, in JPMorgan Chase common
stock and in each of the above S&P indices. The comparison
assumes that all dividends are reinvested.
December 31,
(in dollars)
2005
2006
2007
2008
2009
2010
JPMorgan Chase
$ 100.00
$ 125.55
$ 116.75
$ 87.19
$ 116.98
$ 119.61
S&P Financial Index
100.00
119.19
96.99
43.34
50.80
56.96
S&P 500 Index
100.00
115.79
122.16
76.96
97.33
111.99
This section of JPMorgan Chase’s Annual Report for the year
ended December 31, 2010 (“Annual Report”) provides
management’s discussion and analysis (“MD&A”) of the financial
condition and results of operations of JPMorgan Chase. See the
Glossary of terms on pages 300–303 for definitions of terms used
throughout this Annual Report. The MD&A included in this
Annual Report contains statements that are forward-looking
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements are based on the current beliefs and
expectations of JPMorgan Chase’s management and are subject
to significant risks and uncertainties. These risks and
uncertainties could cause the Firm’s actual results to differ
materially from those set forth in such forward-looking
statements. Certain of such risks and uncertainties are described
herein (see Forward-looking Statements on page 157 of this
Annual Report) and in the JPMorgan Chase Annual Report on
Form 10-K for the year ended December 31, 2010 (“2010 Form
10-K”), in Part I, Item 1A: Risk factors, to which reference is
hereby made.
0
50
100
150
December 31,
(in dollars)
2005
2006 2007 2008 2009 2010
S&P Financial S&P 500 JPMorgan Chase