10-KPeriod: FY2009

JPMORGAN CHASE & CO Annual Report, Year Ended Dec 31, 2009

Filed February 24, 2010For Securities:JPMJPM-PCJPM-PDJPM-PKJPM-PLJPM-PMJPM-PJAMJBVYLD

Summary

JPMorgan Chase & Co. (JPM) filed its 2010 10-K report detailing its performance and financial condition for the fiscal year ended December 30, 2009. The company reported $2.0 trillion in assets and $165.4 billion in stockholders' equity, underscoring its position as a major financial institution. The filing covers JPM's diverse business segments, including investment banking, commercial banking, retail financial services, and card services, operating across more than 60 countries. The report also highlights the significant impact of the prevailing economic and market conditions on the financial services industry. JPM discusses extensive regulatory oversight and ongoing reform proposals, such as the Wall Street Reform and Consumer Protection Act, which could significantly alter the regulatory landscape. Risk factors discussed include the volatility of financial markets, potential impacts of customer and counterparty financial health, and the operational challenges of managing a large, complex global organization. The company's ability to manage liquidity and credit risk is presented as critical to its ongoing operations and profitability, particularly in the wake of the 2008 financial crisis.

Financial Highlights

33 data points
Beta

Revenue

$100.43B

Net Income

$11.73B

11.7% Net Margin

EPS (Diluted)

$2.26

Total Assets

$2.12T

Free Cash Flow

$122.80B

Financial Statements
Beta
Revenue$100.43B
Interest Expense$15.20B
Net Income$11.73B
EPS (Basic)$2.27
EPS (Diluted)$2.26
Shares Outstanding (Basic)3.86B
Shares Outstanding (Diluted)3.88B

Key Highlights

  • 1JPMorgan Chase is a leading global financial services firm with $2.0 trillion in assets and operations in over 60 countries.
  • 2The company operates through six main business segments: Investment Bank, Commercial Banking, Treasury & Securities Services, Asset Management, Retail Financial Services, and Card Services.
  • 3The firm is subject to extensive state and federal regulation in the U.S. and similar regulations in international jurisdictions, with ongoing discussions around financial reform potentially impacting operations.
  • 4Key risks identified include adverse U.S. and international financial market and economic conditions, liquidity management challenges, and the financial health of customers, clients, and counterparties.
  • 5The company emphasizes its robust risk management framework, although acknowledges inherent limitations and the potential for unexpected losses.
  • 6Significant legal proceedings and investigations are detailed, primarily related to the Bear Stearns acquisition, municipal derivatives, and mortgage-backed securities.
  • 7Dividend on common stock was reduced from $0.38 to $0.05 per share in early 2009 to retain capital amidst economic uncertainty.

Frequently Asked Questions

As of December 31, 2009, JPMorgan Chase reported substantial assets of $2.0 trillion and stockholders' equity of $165.4 billion. While the report indicates a strong market position, it also emphasizes the impact of a weak economic environment and highlights various risks, including market volatility, credit risk, and regulatory changes, that could affect future financial performance.

The company identified several key risks. These include adverse economic and financial market conditions (both domestically and internationally), challenges in managing liquidity, the financial stability of its customers, clients, and counterparties (including other financial institutions), concentration of credit and market risk, and the effectiveness of its risk management framework. Additionally, significant legal and regulatory risks were noted, particularly in light of ongoing financial reform discussions.

The report indicates that the firm's businesses were materially affected by the extreme volatility and lack of liquidity in financial markets during 2008 and early 2009. In response to the weak economic conditions and to ensure capital strength, JPM reduced its quarterly common stock dividend from $0.38 to $0.05 per share in February 2009, retaining approximately $5 billion in equity.

JPMorgan Chase acknowledges being subject to extensive regulation and notes the proposals for significant changes in the financial services industry, such as the 'Wall Street Reform and Consumer Protection Act of 2009'. The company states it is unclear which proposals will be enacted but recognizes that new legislation and regulation could result in revenue loss, business limitations, increased costs, and other adverse effects.