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10-K - DECEMBER 2009, KEPCO FORM 10-K - RURAL ELECTRIC COOPERATIVE GRANTOR TRUST KEPCO SERIES 1997dec2009kepco_10k.htm
EX-12 - COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES - RURAL ELECTRIC COOPERATIVE GRANTOR TRUST KEPCO SERIES 1997exhbit12.htm
EX-31.1 - CERTIFICATION PURSUANT TO SECTION 302 - PETERSEN - RURAL ELECTRIC COOPERATIVE GRANTOR TRUST KEPCO SERIES 1997exhbit31_1.htm
EX-32.1 - CERTIFICATION PURSUANT TO SECTION 906 - PETERSEN - RURAL ELECTRIC COOPERATIVE GRANTOR TRUST KEPCO SERIES 1997exhbit32_1.htm
EX-32.2 - CERTIFICATION PURSUANT TO SECTION 906 - LILLY - RURAL ELECTRIC COOPERATIVE GRANTOR TRUST KEPCO SERIES 1997exhbit32_2.htm
EX-31.2 - CERTIFICATION PURSUANT TO SECTION 302 - LILLY - RURAL ELECTRIC COOPERATIVE GRANTOR TRUST KEPCO SERIES 1997exhbit31_2.htm
Exhibit 99

J. P. MORGAN CHASE & CO.
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK

 
As of December 31, 2000, Morgan Guaranty Trust Company of New York ("Morgan Guaranty") was a wholly owned bank subsidiary of J.P. Morgan Chase & Co., a Delaware corporation whose principal office is located in New York, New York. Morgan Guaranty was a commercial bank offering a wide range of banking services to its customers both domestically and internationally. Its business was subject to examination and regulation by Federal and New York State banking authorities.
 
On November 10, 2001, J. P. Morgan & Co. merged with The Chase Manhattan Bank. Upon consummation of the merger, The Chase Manhattan Bank changed its name to JP Morgan Chase & Co.
 
The following table sets forth certain summarized financial information of J.P. Morgan Chase & Co. and for Morgan Guaranty as of the dates and for the periods indicated. The information presented for the years ended December 31, 2009, 2008, 2007, 2006, and 2005 in accordance with generally accepted accounting principles.
 
Five-year summary of consolidated financial highlights
                                         
(unaudited)
                             
(in millions, except per share, headcount and ratio data)
                             
As of or for the year ended December 31,
 
2009
   
2008 (d)
   
2007
   
2006
   
2005
 
 
Selected income statement data
                                       
Total net revenue
 
$
100,434
   
$
67,252
   
$
71,372
   
$
61,999
   
$
54,248
 
Total noninterest expense
   
52,352
     
43,500
     
41,703
     
38,843
     
38,926
 
 
Pre-provision profit (a)
   
48,082
     
23,752
     
29,669
     
23,156
     
15,322
 
Provision for credit losses
   
32,015
     
19,445
     
6,864
     
3,270
     
3,483
 
Provision for credit losses – accounting conformity (b)
   
     
1,534
     
     
     
 
 
Income from continuing operations before income tax expense/(benefit)
   
16,067
     
2,773
     
22,805
     
19,886
     
11,839
 
Income tax expense/(benefit)
   
4,415
     
(926
)
   
7,440
     
6,237
     
3,585
 
 
Income from continuing operations
   
11,652
     
3,699
     
15,365
     
13,649
     
8,254
 
Income from discontinued operations (c)
   
     
     
     
795
     
229
 
 
Income before extraordinary gain
   
11,652
     
3,699
     
15,365
     
14,444
     
8,483
 
Extraordinary gain (d)
   
76
     
1,906
     
     
     
 
 
Net income
 
$
11,728
   
$
5,605
   
$
15,365
   
$
14,444
   
$
8,483
 
 
Per common share data
                                       
Basic earnings (e)
                                       
Income from continuing operations
 
$
2.25
   
$
0.81
   
$
4.38
   
$
3.83
   
$
2.30
 
Net income
   
2.27
     
1.35
     
4.38
     
4.05
     
2.37
 
Diluted earnings (e)(f)
                                       
Income from continuing operations
 
$
2.24
   
$
0.81
   
$
4.33
   
$
3.78
   
$
2.29
 
Net income
   
2.26
     
1.35
     
4.33
     
4.00
     
2.35
 
Cash dividends declared per share
   
0.20
     
1.52
     
1.48
     
1.36
     
1.36
 
Book value per share
   
39.88
     
36.15
     
36.59
     
33.45
     
30.71
 
 
 
 
 

 
 
Common shares outstanding
                                       
Average:           Basic (e)
   
3,862.8
     
3,501.1
     
3,403.6
     
3,470.1
     
3,491.7
 
Diluted (e)
   
3,879.7
     
3,521.8
     
3,445.3
     
3,516.1
     
3,511.9
 
Common shares at period-end
   
3,942.0
     
3,732.8
     
3,367.4
     
3,461.7
     
3,486.7
 
Share price
                                       
High
 
$
47.47
   
$
50.63
   
$
53.25
   
$
49.00
   
$
40.56
 
Low
   
14.96
     
19.69
     
40.15
     
37.88
     
32.92
 
Close
   
41.67
     
31.53
     
43.65
     
48.30
     
39.69
 
Market capitalization
   
164,261
     
117,695
     
146,986
     
167,199
     
138,387
 
Selected ratios
                                       
Return on common equity (“ROE”) (f)
                                       
Income from continuing operations
   
6
%
   
2
%
   
13
%
   
12
%
   
8
%
Net income
   
6
     
4
     
13
     
13
     
8
 
Return on tangible common equity (“ROTCE”) (f)(g)
                                       
Income from continuing operations
   
10
     
4
     
22
     
24
     
15
 
Net income
   
10
     
6
     
22
     
24
     
15
 
Return on assets (“ROA”):
                                       
Income from continuing operations
   
0.58
     
0.21
     
1.06
     
1.04
     
0.70
 
Net income
   
0.58
     
0.31
     
1.06
     
1.10
     
0.72
 
Overhead ratio
   
52
     
65
     
58
     
63
     
72
 
Tier 1 capital ratio
   
11.1
     
10.9
     
8.4
     
8.7
     
8.5
 
Total capital ratio
   
14.8
     
14.8
     
12.6
     
12.3
     
12.0
 
Tier 1 leverage ratio
   
6.9
     
6.9
     
6.0
     
6.2
     
6.3
 
Tier 1 common capital ratio (h)
   
8.8
     
7.0
     
7.0
     
7.3
     
7.0
 
Selected balance sheet data (period-end)
                                       
Trading assets
 
$
411,128
   
$
509,983
   
$
491,409
   
$
365,738
   
$
298,377
 
Securities
   
360,390
     
205,943
     
85,450
     
91,975
     
47,600
 
Loans
   
633,458
     
744,898
     
519,374
     
483,127
     
419,148
 
Total assets
   
2,031,989
     
2,175,052
     
1,562,147
     
1,351,520
     
1,198,942
 
Deposits
   
938,367
     
1,009,277
     
740,728
     
638,788
     
554,991
 
Long-term debt
   
266,318
     
270,683
     
199,010
     
145,630
     
119,886
 
Common stockholders’ equity
   
157,213
     
134,945
     
123,221
     
115,790
     
107,072
 
Total stockholders’ equity
   
165,365
     
166,884
     
123,221
     
115,790
     
107,211
 
Headcount
   
222,316
     
224,961
     
180,667
     
174,360
     
168,847
 
 
 
 
     
(a)
 
Pre-provision profit is total net revenue less noninterest expense. The Firm believes that this financial measure is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses.
(b)
 
Results for 2008 included an accounting conformity loan loss reserve provision related to the acquisition of Washington Mutual Bank’s banking operations.
(c)
 
On October 1, 2006, JPMorgan Chase & Co. completed the exchange of selected corporate trust businesses for the consumer, business banking and middle-market banking businesses of The Bank of New York Company Inc. The results of operations of these corporate trust businesses are being reported as discontinued operations for each of the periods presented.
(d)
 
On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual. On May 30, 2008, a wholly-owned subsidiary of JPMorgan Chase merged with and into The Bear Stearns Companies Inc. (“Bear Stearns”), and Bear Stearns became a wholly-owned subsidiary of JPMorgan Chase. The Washington Mutual acquisition resulted in negative goodwill, and accordingly, the Firm recorded an extraordinary gain. For additional information on these transactions, see Note 2 on pages 143–148 of this Annual Report.
(e)
 
Effective January 1, 2009, the Firm implemented new FASB guidance for participating securities. Accordingly, prior-period amounts have been revised as required. For further discussion of the guidance, see Note 25 on page 224 of this Annual Report.
(f)
 
The calculation of 2009 earnings per share and net income applicable to common equity include a one-time, noncash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of U.S. Troubled Asset Relief Program (“TARP”) preferred capital in the second quarter of 2009. Excluding this reduction, the adjusted ROE and ROTCE were 7% and 11% for 2009. For further discussion, see “Explanation and reconciliation of the Firm’s use of non-GAAP financial measures” on pages 50–52 of this Annual Report.
(g)
 
For further discussion of ROTCE, a non-GAAP financial measure, see “Explanation and reconciliation of the Firm’s use of non-GAAP financial measures” on pages 50–52 of this Annual Report.
(h)
 
Tier 1 common is calculated as Tier 1 capital less qualifying perpetual preferred stock, qualifying trust preferred securities and qualifying minority interest in subsidiaries. The Firm uses the Tier 1 common capital ratio, a non-GAAP financial measure, to assess and compare the quality and composition of the Firm’s capital with the capital of other financial services companies. For further discussion, see Regulatory capital on pages 82–84 of this Annual Report.
     
38
 
JPMorgan Chase & Co. / 2009 Annual Report