JP Morgan Chase 2008 Annual Report Download - page 41

Management’s discussion and analysis
JPMorgan Chase & Co./ 2008 Annual Report 39
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 assumes simultaneous investments of
$100 on December 31, 2003, in JPMorgan Chase common stock and
in each of the above S&P indices. The comparison assumes that all
dividends are reinvested.
This section of the JPMorgan Chase’s Annual Report for the year
ended December 31, 2008 (“Annual Report”) provides manage-
ment’s discussion and analysis of the financial condition and results
of operations (“MD&A”) of JPMorgan Chase. See the Glossary of
terms on pages 230–233 for definitions of terms used throughout
this Annual Report. The MD&A included in this Annual Report con-
tains statements that are forward-looking within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements are
based upon the current beliefs and expectations of JPMorgan
December 31,
(in dollars) 2003 2004 2005 2006 2007 2008
JPMorgan Chase $ 100.00 $ 109.92 $ 116.02 $ 145.36 $134.91 $ 100.54
S&P Financial Index 100.00 110.89 118.07 140.73 114.51 51.17
S&P 500 100.00 110.88 116.33 134.70 142.10 89.53
0
20
40
60
80
100
120
140
160
December 31,
(in dollars)
2003
2004 2005 2006 2007 2008
S&P Financial S&P 500 JPMorgan Chase
Chase’s management and are subject to significant risks and uncer-
tainties. These risks and uncertainties could cause JPMorgan Chase’s
results to differ materially from those set forth in such forward-look-
ing statements. Certain of such risks and uncertainties are described
herein (see Forward-looking statements on page 127 of this Annual
Report) and in the JPMorgan Chase Annual Report on Form 10-K for
the year ended December 31, 2008 (“2008 Form 10-K”), in Part I,
Item 1A: Risk factors, to which reference is hereby made.
INTRODUCTION
JPMorgan Chase & Co., a financial holding company incorporated
under Delaware law in 1968, is a leading global financial services
firm and one of the largest banking institutions in the United States
of America (“U.S.”), with $2.2 trillion in assets, $166.9 billion in
stockholders’ equity and operations in more than 60 countries as of
December 31, 2008. The Firm is a leader in investment banking,
financial services for consumers and businesses, financial transaction
processing and asset management. Under the J.P. Morgan and Chase
brands, the Firm serves millions of customers in the U.S. and many of
the world’s most prominent corporate, institutional and government
clients.
JPMorgan Chase’s principal bank subsidiaries are JPMorgan Chase
Bank, National Association (“JPMorgan Chase Bank, N.A.”), a nation-
al banking association with branches in 23 states in the U.S.; and
Chase Bank USA, National Association (“Chase Bank USA, N.A.”), a
national bank that is the Firm’s credit card issuing bank. JPMorgan
Chase’s principal nonbank subsidiary is J.P. Morgan Securities Inc., the
Firm’s U.S. investment banking firm.
JPMorgan Chase’s activities are organized, for management reporting
purposes, into six business segments, as well as Corporate/Private
Equity. The Firm’s wholesale businesses comprise the Investment
Bank, Commercial Banking, Treasury & Securities Services and Asset
Management segments. The Firm’s consumer businesses comprise the
Retail Financial Services and Card Services segments. A description of
the Firm’s business segments, and the products and services they pro-
vide to their respective client bases, follows.
Investment Bank
J.P. Morgan is one of the world’s leading investment banks, with
deep client relationships and broad product capabilities. The
Investment Bank’s clients are corporations, financial institutions,
governments and institutional investors. The Firm offers a full range
of investment banking products and services in all major capital
markets, including advising on corporate strategy and structure, cap-
ital raising in equity and debt markets, sophisticated risk manage-
ment, market-making in cash securities and derivative instruments,
prime brokerage and research. The Investment Bank (“IB”) also
selectively commits the Firm’s own capital to principal investing and
trading activities.
Retail Financial Services
Retail Financial Services (“RFS”), which includes the Retail Banking
and Consumer Lending reporting segments, serves consumers and
businesses through personal service at bank branches and through
ATMs, online banking and telephone banking as well as through
auto dealerships and school financial aid offices. Customers can use
more than 5,400 bank branches (third-largest nationally) and 14,500
ATMs (second-largest nationally) as well as online and mobile bank-
ing around the clock. More than 21,400 branch salespeople assist