JP Morgan Chase 2012 Annual Report Download - page 98

Management’s discussion and analysis
108 JPMorgan Chase & Co./2012 Annual Report
information on the Firm’s Liquidity Risk Management, see
pages 127–133 of this Annual Report.
Commercial paper and other borrowed funds
The Firm uses commercial paper and other borrowed funds
in its liquidity management activities to meet short-term
funding needs, and in connection with a CIB liquidity
management product, whereby clients choose to sweep
their deposits into commercial paper. Commercial paper
increased due to higher commercial paper issuance from
wholesale funding markets to meet short-term funding
needs, partially offset by a decline in the volume of liability
balances related to CIB’s liquidity management product.
Other borrowed funds increased due to higher secured
short-term borrowings and unsecured short-term
borrowings to meet short-term funding needs. For
additional information on the Firm’s Liquidity Risk
Management and other borrowed funds, see pages 127–
133 of this Annual Report.
Accounts payable and other liabilities
Accounts payable and other liabilities consist of payables to
customers; payables to brokers, dealers and clearing
organizations; payables from failed securities purchases;
income taxes payable; accrued expense, including interest-
bearing liabilities; and all other liabilities, including
litigation reserves and obligations to return securities
received as collateral. Accounts payable and other liabilities
decreased predominantly due to lower CIB client balances,
partially offset by increases in income taxes payables and
litigation reserves related to mortgage foreclosure-related
matters. For additional information on the Firm’s accounts
payable and other liabilities, see Note 20 on page 296 of
this Annual Report.
Beneficial interests issued by consolidated VIEs
Beneficial interests issued by consolidated VIEs represent
interest-bearing beneficial-interest liabilities, which
decreased primarily due to credit card maturities and a
reduction in outstanding conduit commercial paper held by
third parties, partially offset by new credit card issuances
and new consolidated municipal bond vehicles. For
additional information on Firm-sponsored VIEs and loan
securitization trusts, see Off–Balance Sheet Arrangements,
and Note 16 on pages 280–291 of this Annual Report.
Long-term debt
The Firm uses long-term debt (including TruPS and long-
term FHLB advances) to provide cost-effective and
diversified sources of funds and as critical components of
the Firm’s liquidity and capital management activities. Long-
term debt decreased, primarily due to the redemption of
TruPS. For additional information on the Firm’s long-term
debt activities, see the Liquidity Risk Management
discussion on pages 127–133 of this Annual Report.
Stockholders’ equity
Total stockholders’ equity increased, predominantly due to
net income; a net increase in AOCI driven by net unrealized
market value increases on AFS securities, predominantly
non-U.S. residential MBS and corporate debt securities, and
obligations of U.S. states and municipalities, partially offset
by realized gains; issuances and commitments to issue
under the Firm’s employee stock-based compensation plans;
and the issuance of preferred stock. The increase was
partially offset by the repurchases of common equity, and
the declaration of cash dividends on common and preferred
stock.