JP Morgan Chase 2005 Annual Report Download - page 133

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JPMorgan Chase & Co. /2005 Annual Report 131
(table continued from previous page)
Corporate/
Treasury & Securities Services Asset & Wealth Management reconciling items(d)(e)(f) Total
2005 2004 2003 2005 2004 2003 2005 2004 2003 2005 2004 2003
$ 4,179 $ 3,474 $ 2,661 $ 4,583 $ 3,383 $ 2,482 $ 3,598 $ 2,069 $ 566 $ 34,702 $ 26,336 $ 20,419
2,062 1,383 947 1,081 796 488 (9,340) (4,523) (1,368) 19,831 16,761 12,965
6,241 4,857 3,608 5,664 4,179 2,970 (5,742) (2,454) (802) 54,533 43,097 33,384
—71(56) (14) 35 (3,766) (2,150)(g) (1,746) 3,483 2,544 1,540
(154) (90) 36 ——— ——— ———
——— ——— 722(h) 1,365(h) —722 1,365 —
——— ———2,564 3,700 — 2,564 3,700 100
4,470 4,113 3,028 3,860 3,133 2,486 2,024 1,301 529 35,549 29,294 21,716
4,470 4,113 3,028 3,860 3,133 2,486 5,310 6,366 529 38,835 34,359 21,816
1,617 647 615 1,860 1,060 449 (7,286) (6,670) 415 12,215 6,194 10,028
580 207 193 644 379 162 (3,517) (2,986) (253) 3,732 1,728 3,309
$ 1,037 $ 440 $ 422 $ 1,216 $ 681 $ 287 $ (3,769) $ (3,684) $ 668 $ 8,483 $ 4,466 $ 6,719
$ 1,900 $ 2,544 $ 2,738 $ 2,400 $ 3,902 $ 5,507 $ 52,624 $ 33,112 $ 7,674 $ 105,507 $ 75,641 $ 42,988
26,947 23,430 18,379 41,599 37,751 33,780 93,540 111,150 72,030 1,185,066 962,556 775,978
55% 17% 15% 51% 17% 5% NM NM NM 8% 6% 16%
72 85 84 68 75 84 NM NM NM 71 80 65
(f) Segment operating results reflect revenues on a tax-equivalent basis with the corresponding income tax impact recorded within income tax expense.Tax-equivalent adjustments were as follows:
Year ended December 31, (in millions)(b) 2005 2004 2003
Net interest income $ 269 $6 $ 44
Noninterest revenue 571 317 89
Income tax expense 840 323 133
These adjustments are eliminated in Corporate/reconciling items to arrive at the Firm’s reported GAAP results.
(g) Includes $858 million of accounting policy conformity adjustments consisting of approximately $1.4 billion related to the decertification of the seller’s retained interest in credit card securitizations,
partially offset by a benefit of $584 million related to conforming wholesale and consumer provision methodologies for the combined Firm.
(h) Merger costs attributed to the lines of business for 2005 and 2004 were as follows (there were no merger costs in 2003):
Year ended December 31, (in millions)(b) 2005 2004
Investment Bank $32 $74
Retail Financial Services 133 201
Card Services 222 79
Commercial Banking 323
Treasury & Securities Services 95 68
Asset & Wealth Management Services 60 31
Corporate 177 889
.
corporate support areas, which include Central Technology and Operations,
Audit, Executive Office, Finance, Human Resources, Marketing &
Communications, Office of the General Counsel, Corporate Real Estate and
General Services, Risk Management, and Strategy and Development.
Beginning January 1, 2006, TSS will report results for two divisions: TS and
WSS. WSS was formed by consolidating IS and ITS.
The following table provides a summary of the Firm’s segment results for 2005,
2004 and 2003 on an operating basis. The impact of credit card securitizations,
Merger costs, nonoperating Litigation reserve charges and accounting policy
conformity adjustments have been included in Corporate/reconciling items so
that the total Firm results are on a reported basis. Finally, commencing with the
first quarter of 2005, operating revenue (noninterest revenue and net interest
income) for each of the segments and the Firm is presented on a tax-equivalent
basis. Accordingly, revenue from tax exempt securities and investments that
receive tax credits are presented in the operating results on a basis comparable
to taxable securities and investments. This approach allows management to
assess the comparability of revenues arising from both taxable and tax-exempt
sources. The corresponding income tax impact related to these items is
recorded within income tax expense. The Corporate sector’s and the Firm’s
operating revenue and income tax expense for the periods prior to the first
quarter of 2005 have been restated to be presented similarly on a tax-equivalent
basis. This restatement had no impact on the Corporate sector’s or the Firm’s
operating earnings. Segment results for periods prior to July 1, 2004, reflect
heritage JPMorgan Chase–only results and have been restated to reflect the
current business segment organization and reporting classifications.