JP Morgan Chase 2006 Annual Report Download - page 54

MANAGEMENT’S DISCUSSION AND ANALYSIS
JPMorgan Chase & Co.
52 JPMorgan Chase & Co. / 2006 Annual Report
Assets under supervision(a) (in billions)
As of or for the year ended December 31, 2006 2005 2004
Assets by asset class
Liquidity(b) $ 311 $ 238 $ 232
Fixed income 175 165 171
Equities & balanced 427 370 326
Alternatives 100 74 62
Total Assets under management 1,013 847 791
Custody/brokerage/administration/deposits 334 302 315
Total Assets under supervision $ 1,347 $ 1,149 $ 1,106
Assets by client segment
Institutional(c) $ 538 $ 481 $ 466
Retail(c) 259 169 133
Private Bank 159 145 139
Private Client Services 57 52 53
Total Assets under management $ 1,013 $ 847 $ 791
Institutional(c) $ 539 $ 484 $ 487
Retail(c) 343 245 221
Private Bank 357 318 304
Private Client Services 108 102 94
Total Assets under supervision $ 1,347 $ 1,149 $1,106
Assets by geographic region
U.S./Canada $ 630 $ 562 $ 554
International 383 285 237
Total Assets under management $ 1,013 $ 847 $ 791
U.S./Canada $ 889 $ 805 $ 815
International 458 344 291
Total Assets under supervision $ 1,347 $1,149 $1,106
Mutual fund assets by asset class
Liquidity $ 255 $ 182 $ 183
Fixed income 46 45 41
Equities 206 150 104
Total mutual fund assets $ 507 $ 377 $ 328
Assets under management rollforward(d)
Beginning balance, January 1 $ 847 $ 791 $ 561
Flows:
Liquidity 44 83
Fixed income 11 — (8)
Equities, balanced and alternative 34 24 14
Acquisitions/divestitures(e) —— 183
Market/performance/other impacts 77 24 38
Ending balance, December 31 $ 1,013 $ 847 $ 791
Assets under supervision rollforward(d)
Beginning balance, January 1 $ 1,149 $1,106 $ 764
Net asset flows 102 49 42
Acquisitions /divestitures(f) —(33) 221
Market/performance/other impacts 96 27 79
Ending balance, December 31 $ 1,347 $1,149 $1,106
(a) Excludes Assets under management of American Century Companies, Inc.
(b) 2006 data reflects the reclassification of $19 billion of assets under management into liq-
uidity from other asset classes. Prior period data were not restated.
(c) In 2006, assets under management of $22 billion from Retirement planning services has
been reclassified from the Institutional client segment to the Retail client segment in order
to be consistent with the revenue by client segment reporting.
(d) 2004 results include six months of the combined Firm’s results and six months of heritage
JPMorgan Chase results.
(e) Reflects the Merger with Bank One ($176 billion) and the acquisition of a majority interest
in Highbridge ($7 billion) in 2004.
(f) Reflects the sale of BrownCo ($33 billion) in 2005, and the Merger with Bank One
($214 billion) and the acquisition of a majority interest in Highbridge ($7 billion) in 2004.
Assets under supervision
2006 compared with 2005
Assets under supervision (“AUS”) were $1.3 trillion, up 17%, or $198 billion,
from the prior year. Assets under management (“AUM”) were $1.0 trillion, up
20%, or $166 billion, from the prior year. The increase was the result of net
asset inflows in the Retail segment, primarily in equity-related products,
Institutional segment flows, primarily in liquidity products, and market appre-
ciation. Custody, brokerage, administration and deposit balances were $334
billion, up by $32 billion. The Firm also has a 43% interest in American
Century Companies, Inc., whose AUM totaled $103 billion and $101 billion at
December 31, 2006 and 2005, respectively.
2005 compared with 2004
AUS at December 31, 2005, were $1.1 trillion, up 4%, or $43 billion, from
the prior year despite a $33 billion reduction due to the sale of BrownCo.
AUM were $847 billion, up 7%. The increase was primarily the result of net
asset inflows in equity-related products and global equity market apprecia-
tion. Custody, brokerage, administration, and deposits were $302 billion,
down $13 billion due to a $33 billion reduction from the sale of BrownCo.
The Firm also has a 43% interest in American Century Companies, Inc.,
whose AUM totaled $101 billion and $98 billion at December 31, 2005 and
2004, respectively.