JP Morgan Chase 2006 Annual Report Download - page 129

Download and view the complete annual report

Please find page 129 of the 2006 JP Morgan Chase annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 156

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156

JPMorgan Chase & Co. / 2006 Annual Report 127
Note 23 – Accumulated other comprehensive income (loss)
Accumulated other comprehensive income (loss) includes the after-tax change in unrealized gains and losses on AFS securities, foreign currency translation adjust-
ments (including the impact of related derivatives), cash flow hedging activities and the net actuarial loss and prior service cost related to the Firm’s defined benefit
pension and OPEB plans.
Net actuarial loss and
prior service (credit) Accumulated
Translation of defined benefit other
Unrealized gains (losses) adjustments, Cash pension and comprehensive
(in millions) on AFS securities(b) net of hedges flow hedges OPEB plans(f) income (loss)
Balance at
December 31, 2003(a) $ 19 $ (6) $ (43) $ — $ (30)
Net change(a) (80)(c) (2) (96) — (178)
Balance at
December 31, 2004 (61) (8) (139) — (208)
Net change (163)(d) — (255) — (418)
Balance at
December 31, 2005 (224) (8) (394) — (626)
Net change 253(e) 13 (95) — 171
Adjustment to initially apply
SFAS 158, net of taxes — — — (1,102) (1,102)
Balance at
December 31, 2006 $ 29 $ 5 $ (489) $ (1,102) $ (1,557)
(a) Balance at December 31, 2003 reflects heritage JPMorgan Chase only. 2004 results include six months of the combined Firm’s results and six months of heritage JPMorgan Chase results.
(b) Represents the after-tax difference between the fair value and amortized cost of the AFS securities portfolio and retained interests in securitizations recorded in Other assets.
(c) The net change during 2004 was due primarily to higher interest rates and recognition of unrealized gains from securities sales.
(d) The net change during 2005 was due primarily to higher interest rates, partially offset by the reversal of unrealized losses from securities sales.
(e) The net change during 2006 was due primarily to the reversal of unrealized losses from securities sales.
(f) For further discussion of SFAS 158, see Note 7 on pages 100–105 of this Annual Report.
The following table presents the after-tax changes in net unrealized holdings gains (losses), reclassification adjustments for realized gains and losses on AFS securities
and cash flow hedges, and changes resulting from foreign currency translation adjustments (including the impact of related derivatives). The table also reflects the
adjustment to Accumulated other comprehensive income (loss) resulting from the initial application of SFAS 158 to the Firm’s defined benefit pension and OPEB plans.
Reclassification adjustments include amounts recognized in Net income during the current year that had been recorded previously in Other comprehensive income (loss).
2006 2005 2004(b)
Before Tax After Before Tax After Before Tax After
Year ended December 31, (in millions) tax effect tax tax effect tax tax effect tax
Unrealized gains (losses) on AFS securities:
Net unrealized holdings gains (losses) arising during
the period $ (403) $ 144 $ (259) $ (1,706) $ 648 $ (1,058) $ 68 $ (27) $ 41
Reclassification adjustment for realized (gains) losses
included in Net income 797 (285) 512 1,443 (548) 895 (200) 79 (121)
Net change 394 (141) 253 (263) 100 (163) (132) 52 (80)
Translation adjustments:
Translation 590 (236) 354 (584) 233 (351) 474 (194) 280
Hedges (563) 222 (341) 584 (233) 351 (478) 196 (282)
Net change 27 (14) 13 — — — (4) 2 (2)
Cash flow hedges:
Net unrealized holdings gains (losses) arising during
the period (250) 98 (152) (470) 187 (283) 57 (23) 34
Reclassification adjustment for realized (gains) losses
included in Net income 93 (36) 57 46 (18) 28 (216) 86 (130)
Net change (157) 62 (95) (424) 169 (255) (159) 63 (96)
Total Other comprehensive income $ 264 $ (93) $ 171 $ (687) $ 269 $ (418) $ (295) $ 117 $(178)
Net actuarial loss and prior service cost (credit)
of defined benefit pension and OPEB plans:
Adjustments to initially apply SFAS 158(a) $ (1,746) $ 644 $(1,102) NA NA NA NA NA NA
(a) For further discussion of SFAS 158, see Note 7 on pages 100–105 of this Annual Report.
(b) 2004 results include six months of the combined Firm’s results and six months of heritage JPMorgan Chase results.