JP Morgan Chase 2005 Annual Report Download - page 134

Notes to consolidated financial statements
JPMorgan Chase & Co.
132 JPMorgan Chase & Co. /2005 Annual Report
Note 32 – Parent company
Parent company – statements of income
Year ended December 31, (in millions)(a) 2005 2004 2003
Income
Dividends from bank and bank
holding company subsidiaries $ 2,361 $ 1,208 $ 2,436
Dividends from nonbank subsidiaries(b) 791 773 2,688
Interest income from subsidiaries 2,369 1,370 945
Other interest income 209 137 130
Other income from subsidiaries, primarily fees:
Bank and bank holding company 246 833 632
Nonbank 462 499 385
Other income 13 204 (25)
Total income 6,451 5,024 7,191
Expense
Interest expense to subsidiaries(b) 846 603 422
Other interest expense 3,076 1,834 1,329
Compensation expense 369 353 348
Other noninterest expense 496 1,105 747
Total expense 4,787 3,895 2,846
Income before income tax benefit and
undistributed net income of subsidiaries 1,664 1,129 4,345
Income tax benefit 852 556 474
Equity in undistributed net income (loss)
of subsidiaries 5,967 2,781 1,900
Net income $ 8,483 $ 4,466 $ 6,719
Parent company – balance sheets
December 31, (in millions) 2005 2004
Assets
Cash with banks, primarily with bank subsidiaries $ 461 $ 513
Deposits with banking subsidiaries 9,452 10,703
Securities purchased under resale agreements,
primarily with nonbank subsidiaries 24 —
Trading assets 7,548 3,606
Available-for-sale securities 285 2,376
Loans 338 162
Advances to, and receivables from, subsidiaries:
Bank and bank holding company 22,673 19,076
Nonbank 31,342 34,456
Investment (at equity) in subsidiaries:
Bank and bank holding company 110,745 105,599
Nonbank(b) 21,367 17,701
Goodwill and other intangibles 804 890
Other assets 10,553 11,557
Total assets $ 215,592 $206,639
Liabilities and stockholders’ equity
Borrowings from, and payables to, subsidiaries(b) $ 16,511 $ 14,195
Other borrowed funds, primarily commercial paper 15,675 15,050
Other liabilities 7,721 6,309
Long-term debt(c) 68,474 65,432
Total liabilities 108,381 100,986
Stockholders’ equity 107,211 105,653
Total liabilities and stockholders’ equity $ 215,592 $206,639
Parent company – statements of cash flows
Year ended December 31, (in millions)(a) 2005 2004 2003
Operating activities
Net income $ 8,483 $ 4,466 $ 6,719
Less: Net income of subsidiaries 9,119 4,762 7,017
Parent company net loss (636) (296) (298)
Add: Cash dividends from subsidiaries(b) 2,891 1,964 5,098
Other, net (130) (81) (272)
Net cash provided by operating activities 2,125 1,587 4,528
Investing activities
Net cash change in:
Deposits with banking subsidiaries 1,251 1,851 (2,560)
Securities purchased under resale agreements,
primarily with nonbank subsidiaries (24) 355 99
Loans (176) 407 (490)
Advances to subsidiaries (483) (5,772) (3,165)
Investment (at equity) in subsidiaries (2,949) (4,015) (2,052)
Other, net 34 11 12
Available-for-sale securities:
Purchases (215) (392) (607)
Proceeds from sales and maturities 124 114 654
Cash received in business acquisitions —4,608 —
Net cash (used in) provided by
investing activities (2,438) (2,833) (8,109)
Financing activities
Net cash change in borrowings
from subsidiaries(b) 2,316 941 2,005
Net cash change in other borrowed funds 625 (1,510) (2,104)
Proceeds from the issuance of
long-term debt 15,992 12,816 12,105
Repayments of long-term debt (10,864) (6,149) (6,733)
Proceeds from the issuance of stock
and stock-related awards 682 848 1,213
Redemption of preferred stock (200) (670) —
Treasury stock purchased (3,412) (738) —
Cash dividends paid (4,878) (3,927) (2,865)
Net cash provided by (used in)
financing activities 261 1,611 3,621
Net increase (decrease) in cash with banks (52) 365 40
Cash with banks
at the beginning of the year 513 148 108
Cash with banks at the end of
the year, primarily with bank subsidiaries $ 461 $ 513 $ 148
Cash interest paid $ 3,838 $ 2,383 $ 1,918
Cash income taxes paid $ 3,426 $ 701 $ 754
(a) 2004 results include six months of the combined Firm’s results and six months of heritage
JPMorgan Chase results. 2003 reflects the results of heritage JPMorgan Chase only. For a
further discussion of the Merger, see Note 2 on pages 92–93 of this Annual Report.
(b) Subsidiaries include trusts that issued guaranteed capital debt securities (“issuer trusts”).
As a result of FIN 46, the Parent deconsolidated these trusts in 2003. The Parent received
dividends of $21 million and $15 million from the issuer trusts in 2005 and 2004, respec-
tively. For a further discussion on these issuer trusts, see Note 17 on pages 117–118 of
this Annual Report.
(c) At December 31, 2005, debt that contractually matures in 2006 through 2010 totaled
$10.3 billion, $9.5 billion, $11.9 billion, $8.8 billion and $3.8 billion, respectively.