What is the primary reason for filing this amended 10-K?

JPMorgan Chase is filing this amended 10-K to restate its Consolidated Statements of Cash Flows for the fiscal years 2005, 2004, and 2003, and for the quarterly periods within those years. This correction involves reclassifying certain cash flows related to loans originated or purchased for resale.

Will this restatement affect the company's reported net income or stock price?

No, the amendment specifically impacts the classification within the Statement of Cash Flows. The company explicitly states that the restatements will not affect its Consolidated Statements of Income, Consolidated Balance Sheets, or Consolidated Statements of Changes in Stockholders' Equity. Therefore, historical revenues, net income, and earnings per share remain unchanged, and there should be no direct impact on the stock price due to the restatement itself.

What specific accounting change led to the restatement?

The restatement is due to the misclassification of cash flows related to certain residential mortgages and other loans originated or purchased with the intent to sell. These cash flows were incorrectly classified as investing activities but should have been classified as operating activities, in accordance with Statement of Financial Accounting Standards No. 102.

Has the company's internal control system failed?

While a misclassification occurred, management, including the CEO and CFO, concluded that the company's disclosure controls and procedures remained effective. The filing acknowledges that in a large and complex firm like JPMorgan Chase, lapses in internal controls can occur from time to time, but it does not indicate a failure of the overall system. The company remains committed to maintaining high standards of internal control over financial reporting.

JPMORGAN CHASE & CO 10-K Filed Aug 3, 2006

Summary

JPMorgan Chase & Co. (JPM) filed an amendment to its 2005 Form 10-K on August 2, 2006, primarily to restate its Consolidated Statements of Cash Flows for 2005, 2004, and 2003, as well as quarterly periods in 2005 and Q1 2006. This amendment does not impact the company's revenues, net income, earnings per share, total assets, or regulatory capital. The restatements are due to the reclassification of cash flows related to certain residential mortgages and other loans originated or purchased with the intent to sell, which were incorrectly classified as investing activities instead of operating activities. Despite the restatement, management, including the CEO and CFO, concluded that the company's disclosure controls and procedures remained effective. The company remains committed to strong internal controls over financial reporting, acknowledging that in a firm of its size and complexity, control deficiencies can occur. The filing also lists numerous exhibits, including restated incorporation documents, by-laws, and various indentures and compensation/incentive plans related to JPMorgan Chase and its predecessor companies (e.g., Bank One, Chase Manhattan, J.P. Morgan & Co.).

Key Highlights

1Restatement of Cash Flow Statements: JPM is amending its 2005 10-K to correct the classification of cash flows from certain loans held for sale, moving them from investing to operating activities.

2No Impact on Key Financial Metrics: The restatement specifically affects the presentation within the cash flow statement and does not alter historical revenues, net income, EPS, total assets, or regulatory capital.

3Disclosure Controls Deemed Effective: Management, including senior executives, affirmed the effectiveness of the company's disclosure controls and procedures despite the classification error.

4Commitment to Internal Controls: The company acknowledges the inherent limitations of internal controls and the potential for deficiencies in a large organization.

5Extensive Exhibit List: The filing includes a comprehensive list of exhibits, detailing various corporate documents, debt instruments (indentures), and executive compensation plans from JPMorgan Chase and its legacy entities.

6Focus on Loan Classification: The core issue addressed by the amendment is the proper accounting treatment for cash flows associated with specific types of loans.

JPMORGAN CHASE & CO Annual Report (Amendment), Year Ended Dec 31, 2005

Summary

Key Highlights

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