JP Morgan Chase 2015 Annual Report Download - page 306

Notes to consolidated financial statements
296 JPMorgan Chase & Co./2015 Annual Report
Note 30 – Commitments, pledged assets and
collateral
Lease commitments
At December 31, 2015, JPMorgan Chase and its
subsidiaries were obligated under a number of
noncancelable operating leases for premises and equipment
used primarily for banking purposes, and for energy-related
tolling service agreements. Certain leases contain renewal
options or escalation clauses providing for increased rental
payments based on maintenance, utility and tax increases,
or they require the Firm to perform restoration work on
leased premises. No lease agreement imposes restrictions
on the Firm’s ability to pay dividends, engage in debt or
equity financing transactions or enter into further lease
agreements.
The following table presents required future minimum
rental payments under operating leases with noncancelable
lease terms that expire after December 31, 2015.
Year ended December 31, (in millions)
2016 $ 1,668
2017 1,647
2018 1,447
2019 1,263
2020 1,125
After 2020 4,679
Total minimum payments required 11,829
Less: Sublease rentals under noncancelable subleases (1,889)
Net minimum payment required $ 9,940
Total rental expense was as follows.
Year ended December 31,
(in millions) 2015 2014 2013
Gross rental expense $ 2,015 $ 2,255 $ 2,187
Sublease rental income (411) (383) (341)
Net rental expense $ 1,604 $ 1,872 $ 1,846
Pledged assets
The Firm may pledge financial assets that it owns to
maintain potential borrowing capacity with central banks
and for other purposes, including to secure borrowings and
public deposits, and to collateralize repurchase and other
securities financing agreements. Certain of these pledged
assets may be sold or repledged by the secured parties and
are identified as financial instruments owned (pledged to
various parties) on the Consolidated balance sheets. At
December 31, 2015 and 2014, the Firm had pledged assets
of $385.6 billion and $324.5 billion, respectively, at
Federal Reserve Banks and FHLBs. In addition, as of
December 31, 2015 and 2014, the Firm had pledged $50.7
billion and $60.1 billion, respectively, of financial assets
that may not be sold or repledged by the secured parties.
Total assets pledged do not include assets of consolidated
VIEs; these assets are used to settle the liabilities of those
entities. See Note 16 for additional information on assets
and liabilities of consolidated VIEs. For additional
information on the Firm’s securities financing activities and
long-term debt, see Note 13 and Note 21, respectively. The
significant components of the Firm’s pledged assets were as
follows.
December 31, (in billions) 2015 2014
Securities $ 124.3 $ 118.7
Loans 298.6 248.2
Trading assets and other 144.9 169.0
Total assets pledged $ 567.8 $ 535.9
Collateral
At December 31, 2015 and 2014, the Firm had accepted
assets as collateral that it could sell or repledge, deliver or
otherwise use with a fair value of approximately $748.5
billion and $761.7 billion, respectively. This collateral was
generally obtained under resale agreements, securities
borrowing agreements, customer margin loans and
derivative agreements. Of the collateral received,
approximately $580.9 billion and $596.8 billion,
respectively, were sold or repledged, generally as collateral
under repurchase agreements, securities lending
agreements or to cover short sales and to collateralize
deposits and derivative agreements.