JP Morgan Chase 2010 Annual Report Download - page 81

JPMorgan Chase & Co./2010 Annual Report
81
(c) Pretax return on average managed outstandings.
(d) The Chase Paymentech Solutions joint venture was dissolved effective
November 1, 2008. JPMorgan Chase retained approximately 51% of the
business and operates the business under the name Chase Paymentech
Solutions. For the period January 1 through October 31, 2008, the data
presented represents activity for the Chase Paymentech Solutions joint
venture, and for the period November 1, 2008, through December 31,
2010, the data presented represents activity for Chase Paymentech
Solutions.
(e) Results reflect the impact of purchase accounting adjustments related to the
Washington Mutual transaction and the consolidation of the WMMT in the
second quarter of 2009. The delinquency rates as of December 31, 2010,
were not affected.
(f) Total average loans includes loans held-for-sale of $148 million for full year
2010. These amounts are excluded when calculating the net charge-off
rate. The net charge-off rate including loans held-for-sale, which is a non-
GAAP financial measure, would have been 9.72% for the full year 2010.
(g) Based on loans on the Consolidated Balance Sheets.
(h) Includes $1.0 billion of loans at December 31, 2009, held by the WMMT,
which were consolidated onto the Card Services balance sheet at fair value
during the second quarter of 2009. No allowance for loan losses was
recorded for these loans as of December 31, 2009. Excluding these
loans, the allowance for loan losses to period-end loans would have
been 12.43% as of December 31, 2009.
(i) Total period-end loans includes loans held-for-sale of $2.2 billion at
December 31, 2010. No allowance for loan losses was recorded for these
loans as of December 31, 2010. The loans held-for-sale are excluded when
calculating the allowance for loan losses to period-end loans.
(j) Statistics are only presented for periods after September 25, 2008, the date
of the Washington Mutual transaction.
(k) As a percentage of average managed outstandings.
(l) Excludes the impact of purchase accounting adjustments related to the
Washington Mutual transaction and the consolidation of the WMMT in the
second quarter of 2009.
NA: Not applicable
Reconciliation from reported basis to managed basis
The financial information presented in the following table reconciles
reported basis and managed basis to disclose the effect of
securitizations reported in 2009 and 2008. Effective January 1,
2010, the Firm adopted accounting guidance related to VIEs. As a
result of the consolidation of the credit card securitization trusts,
reported and managed basis relating to credit card securitizations
are equivalent for periods beginning after January 1, 2010. For
further details regarding the Firm’s application and impact of the
guidance, see Note 16 on pages 244–259 of this Annual Report.
Year ended December 31,
(in millions, except ratios) 2010 2009 2008
Income stat
e
ment data
Credit card income
Reported
$
3,513
$ 5,106 $ 6,082
Securitization adjustments
NA
(1,494) (3,314 )
Managed credit card
income $ 3,513 $ 3,612 $ 2,768
Net interest income
Reported
$
13,886
$ 9,447 $ 6,838
Securitization adjustments
NA
7,937 6,917
Managed net interest
income $ 13,886 $ 17,384 $ 13,755
Total net revenue
Reported
$
17,163
$ 13,861 $ 12,871
Securitization adjustments
NA
6,443 3,603
Managed total net
revenue $ 17,163 $ 20,304 $ 16,474
Provision for credit losses
Reported
$
8,037
$ 12,019 $ 6,456
Securitization adjustments
NA
6,443 3,603
Managed provision for
credit losses $ 8,037 $ 18,462 $ 10,059
Balance sheet
–
average
balances
Total average assets
Reported
$
145,750
$ 110,516 $ 96,807
Securitization adjustments
NA
82,233 76,904
Managed average assets
$
145,750
$ 192,749 $ 173,711
Credit quality statistics
Net charg
e
-
offs
Reported
$
14,037
$ 9,634 $ 4,556
Securitization adjustments
NA
6,443 3,603
Managed net charge
-
offs
$
14,037
$ 16,077 $ 8,159
Net charge
-
off rates
Reported
9.73
%
11.07% 5.47%
Securitized
NA
7.55 4.53
Managed net charge
-
off
rate 9.73 9.33 5.01
NA: Not applicable
The following are brief descriptions of selected business metrics within Card Services.
• Sales volume – Dollar amount of cardmember purchases, net of returns.
• Open accounts – Cardmember accounts with charging privileges.
• Merchant acquiring business – A business that processes bank card transactions for merchants.
• Bank card volume – Dollar amount of transactions processed for merchants.
• Total transactions – Number of transactions and authorizations processed for merchants.