Notes to consolidated financial statements JPMorgan Chase & Co.  108 JPMorgan Chase & Co.  / 2005 Annual Report JPMorgan Chase maintains an allowance for credit losses as follows:
## Table 0 ##
The table below summarizes the changes in the Allowance for loan losses:
## Table 1 ##
(a) Represents an increase of approximately $1.4 billion as a result of the decertification of heritage Bank One seller’s interest in credit card securitizations, partially offset by a reduction of $357 million to conform provision methodologies.
(b) 2005 includes $203 million of asset-specific and $6.9 billion of formula-based allowance.
Included within the formula-based allowance was $5.1 billion related to a statistical calculation (including $400 million related to Hurricane Katrina), and an adjustment to the statistical calculation of $1.8 billion.
(c) 2004 results include six months of the combined Firm’s results and six months of heritage JPMorgan Chase results.
(d) Includes $406 million related to the Manufactured Home Loan portfolio in the fourth quarter of 2004.
(e) Primarily represents the transfer of the allowance for accrued interest and fees on reported and securitized credit card loans.
(f) 2004 includes $469 million of asset-specific loss and $6.8 billion of formula-based loss.
Included within the formula-based loss is $4.8 billion related to statistical calculation and an adjustment to the statistical calculation of $2.0 billion.
The table below summarizes the changes in the Allowance for lending-related commitments:
## Table 2 ##
(a) Represents a reduction of $227 million to conform provision methodologies in the wholesale portfolio.
(b) 2005 includes $60 million of asset-specific and $340 million of formula-based allowance.2004 includes $130 million of asset-specific and $362 million of formula-based allowance.
The formula-based allowance for lending-related commitments is based upon a statistical calculation.
There is no adjustment to the statistical calculation for lending-related commitments.
(c) 2004 results include six months of the combined Firm’s results and six months of heritage JPMorgan Chase results.
Note 13 – Loan securitizations JPMorgan Chase securitizes, sells and services various consumer loans, such as consumer real estate, credit card and automobile loans, as well as certain wholesale loans (primarily real estate) originated by the Investment Bank.
In addition, the Investment Bank purchases, packages and securitizes commercial and consumer loans.
All IB activity is collectively referred to below as Wholesale activities.
Interests in the sold and securitized loans may be retained.
The Firm records a loan securitization as a sale when the transferred loans are legally isolated from the Firm’s creditors and the accounting criteria for a sale are met.
Those criteria are (1) the assets are legally isolated from the Firm’s creditors; (2) the entity can pledge or exchange the financial assets or, if the entity is a QSPE, its investors can pledge or exchange their interests; and (3) the Firm does not maintain effective control via an agreement to repurchase the assets before their maturity or have the ability to unilaterally cause the holder to return the assets.
Gains or losses recorded on loan securitizations depend, in part, on the carrying amount of the loans sold and are allocated between the loans sold and the retained interests, based upon their relative fair values at the date of sale.
Gains on securitizations are reported in noninterest revenue.
Since quoted market prices are generally not available, the Firm usually estimates the fair value of these retained interests by determining the present value of future expected cash flows using modeling techniques.
Such models incorporate management’s best estimates of key variables, such as expected credit losses, prepayment speeds and the discount rates appropriate for the risks involved.
Retained interests that are subject to prepayment risk, such that JPMorgan Chase may not recover substantially all of its investment, are recorded at fair value; subsequent adjustments are reflected in Other comprehensive income or in earnings, if the fair value of the retained interest has declined below its carrying amount and such decline has been determined to be other-than-temporary.
Interests in the securitized loans are generally retained by the Firm in the form of senior or subordinated interest-only strips, subordinated tranches, escrow accounts and servicing rights, and they are generally recorded in Other assets.
In addition, credit card securitization trusts require the Firm to maintain a minimum undivided interest in the trusts, representing the Firm’s interests in the receivables transferred to the trust that have not been securitized.
These interests are not represented by security certificates.
The Firm’s undivided interests are carried at historical cost and are classified in Loans.
Retained interests from wholesale activities are reflected as trading assets.
JPMorgan Chase retains servicing responsibilities for all residential mortgage, credit card and automobile loan securitizations and for certain wholesale activity securitizations it sponsors, and receives servicing fees based on the securitized loan balance plus certain ancillary fees.
The Firm also retains the right to service the residential mortgage loans it sells in connection with mortgage-backed securities transactions with the Government National Mortgage Association (“GNMA”), Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”).
For a discussion of mortgage servicing rights, see Note 15 on pages 114–116 of this Annual report.
JPMorgan Chase-sponsored securitizations utilize SPEs as part of the securitization process.
These SPEs are structured to meet the definition of a QSPE (as discussed in Note 1 on page 91 of this Annual Report); accordingly, the assets and liabilities of securitization-related QSPEs are not reflected in the Firm’s Consolidated balance sheets (except for retained interests, as described below) but are included on the balance sheet of the QSPE purchasing the
Description of business segment reporting methodology Results of the business segments are intended to reflect each segment as if it were essentially a stand-alone business.
The management reporting process that derives these results allocates income and expense using market-based methodologies.
Effective with the Merger on July 1, 2004, several of the allocation methodologies were revised, as noted below.
As prior periods have not been revised to reflect these new methodologies, they are not comparable to the presentation of periods beginning with the third quarter of 2004.
Further, the Firm continues to assess the assumptions, methodologies and reporting reclassifications used for segment reporting, and further refinements may be implemented in future periods.
Revenue sharing When business segments join efforts to sell products and services to the Firm’s clients, the participating business segments agree to share revenues from those transactions.
These revenue-sharing agreements were revised on the Merger date to provide consistency across the lines of business.
Funds transfer pricing Funds transfer pricing (“FTP”) is used to allocate interest income and expense to each business and transfer the primary interest rate risk exposures to Corporate.
The allocation process is unique to each business and considers the interest rate risk, liquidity risk and regulatory requirements of its standalone peers.
Business segments may retain certain interest rate exposures, subject to management approval, that would be expected in the normal operation of a similar peer business.
In the third quarter of 2004, FTP was revised to conform the policies of the combined firms.
Expense allocation Where business segments use services provided by support units within the Firm, the costs of those support units are allocated to the business segments.
Those expenses are allocated based upon their actual cost, or the lower of actual cost or market cost, as well as upon usage of the services provided.
Effective with the third quarter of 2004, the cost allocation methodologies of the heritage firms were aligned to provide consistency across the business segments.
In addition, expenses related to certain corporate functions, technology and operations ceased to be allocated to the business segments and are retained in Corporate.
These retained expenses include parent company costs that would not be incurred if the segments were stand-alone businesses; adjustments to align certain corporate staff, technology and operations allocations with market prices; and other one-time items not aligned with the business segments.
During 2005, the Firm refined cost allocation methodologies related to certain corporate functions, technology and operations expenses in order to improve transparency, consistency and accountability with regard to costs allocated across business segments.
Prior periods have not been revised to reflect these new cost allocation methodologies.
Capital allocation Each business segment is allocated capital by taking into consideration standalone peer comparisons, economic risk measures and regulatory capital requirements.
The amount of capital assigned to each business is referred to as equity.
At the time of the Merger, goodwill, as well as the associated capital, was allocated solely to Corporate.
Effective January 2006, the Firm expects to refine its methodology for allocating capital to the business segments to include any goodwill associated with line of business-directed acquisitions since the Merger.
U. S.  GAAP requires the allocation of goodwill to the business segments for impairment testing (see Critical accounting estimates used by the Firm and Note 15 on pages 81– 83 and 114–116, respectively, of this Annual Report).
See the Capital management section on page 56 of this Annual Report for a discussion of the equity framework.
Credit reimbursement TSS reimburses the IB for credit portfolio exposures the IB manages on behalf of clients the segments share.
At the time of the Merger, the reimbursement methodology was revised to be based upon pre-tax earnings, net of the cost of capital related to those exposures.
Prior to the Merger, the credit reimbursement was based upon pre-tax earnings, plus the allocated capital associated with the shared clients.
Tax-equivalent adjustments Segment and Firm results reflect revenues on a tax-equivalent basis for segment reporting purposes.
Refer to Explanation and reconciliation of the Firm’s non-GAAP financial measures on page 31 of this Annual Report for additional details.
Segment results – Operating basis(a)(b) (Table continued from previous page)
## Table 3 ##
Management’s discussion and analysis JPMorgan Chase & Co Total managed consumer loans at December 31, 2005, were $340 billion, up from $338 billion at year-end 2004.
Consumer lending–related commitments increased by 9% to $656 billion at December 31, 2005, reflecting growth in credit cards and home equity lines of credit.
The following discussion relates to the specific loan and lending-related categories within the consumer portfolio.
Retail Financial Services Average RFS loan balances for 2005 were $198 billion.
New loans originated in 2005 reflect high credit quality consistent with management’s focus on the prime credit market segment.
The net charge-off rate for retail loans in 2005 was 0.31%, a decrease of 36 basis points from 2004.
This decrease was attributable primarily to $406 million of charge-offs in the fourth quarter of 2004 associated with the sale of the $4.0 billion manufactured home loan portfolio.
Excluding these charge-offs, the net charge-off rate would have improved eight basis points.
Home Finance: Home finance loans on the balance sheet at December 31, 2005, were $133 billion.
This amount consisted of $77 billion of home equity and other loans and $56 billion of mortgages, including mortgage loans held-for-sale.
Home finance receivables as of December 31, 2005, reflect an increase of $9 billion from year-end 2004 driven by growth in the home equity portfolio.
Home Finance provides consumer real estate lending to the full spectrum of credit borrowers, including $15 billion in sub-prime credits at December 31, 2005.
Home Finance does not offer mortgage products that result in negative amortization but does offer mortgages with interest-only payment options to predominantly prime borrowers.
The geographic distribution of outstanding consumer real estate loans is well diversified as shown in the table below.
Consumer real estate loan portfolio by geographic locatio
## Table 4 ##
Auto & Education Finance: As of December 31, 2005,Auto & education finance loans decreased to $49 billion from $63 billion at year-end 2004.
The decrease in outstanding loans was caused primarily by a difficult auto lending market in 2005, $3.8 billion in securitizations, the sale of the $2.0 billion recreational vehicle portfolio and the de-emphasis of vehicle leasing, which comprised $4.4 billion of outstanding loans as of December 31, 2005.
It is anticipated that over time vehicle leases will account for a smaller share of balance sheet receivables and exposure.
The Auto & Education loan portfolio reflects a high concentration of prime quality credits.
Consumer & Small Business and other: As of December 31, 2005, Small business & other consumer loans remained relatively stable at $14.8 billion compared with 2004 year-end levels of $15.1 billion.
The portfolio reflects highly collateralized loans, often with personal loan guarantees.
Card Services JPMorgan Chase analyzes the credit card portfolio on a managed basis, which includes credit card receivables on the consolidated balance sheet and those receivables sold to investors through securitization.
Managed credit card receivables were $142 billion at December 31, 2005, an increase of $7 billion from year-end 2004, reflecting solid growth in the business as well as the addition of $2.2 billion of receivables as a result of the acquisition of the Sears Canada credit card business.
Consumer credit quality trends remained stable despite the effects of increased losses due to bankruptcy legislation, which became effective October 17, 2005.
The managed credit card net charge-off rate decreased to 5.21% in 2005 from 5.27% in 2004.
The 30-day delinquency rates declined significantly to 2.79% in 2005 from 3.70% in 2004, primarily driven by accelerated loss recognition of delinquent accounts as a result of the bankruptcy reform legislation and strong underlying credit quality.
The managed credit card portfolio continues to reflect a well-seasoned portfolio that has good U. S.  geographic diversificatio

<table><tr><td></td><td colspan="2">Reported in:</td></tr><tr><td>Allowance for</td><td></td><td></td></tr><tr><td>credit losses on:</td><td>Balance sheet</td><td>Income statement</td></tr><tr><td>Loans</td><td>Allowance for loan losses</td><td>Provision for credit losses</td></tr><tr><td>Lending-relatedcommitments</td><td>Other liabilities</td><td>Provision for credit losses</td></tr></table>
<table><tr><td>December 31, (in millions)</td><td>2005</td><td>2004(c)</td></tr><tr><td>Allowance for loan losses at January 1</td><td>$7,320</td><td>$4,523</td></tr><tr><td>Addition resulting from the Merger, July 1, 2004</td><td>—</td><td>3,123</td></tr><tr><td>Gross charge-offs</td><td>-4,869</td><td>-3,805 (d)</td></tr><tr><td>Gross recoveries</td><td>1,050</td><td>706</td></tr><tr><td>Net charge-offs</td><td>-3,819</td><td>-3,099</td></tr><tr><td>Provision for loan losses:</td><td></td><td></td></tr><tr><td>Provision excludingaccounting policy conformity</td><td>3,575</td><td>1,798</td></tr><tr><td>Accounting policy conformity<sup>(a)</sup></td><td>—</td><td>1,085</td></tr><tr><td>Total Provision for loan losses</td><td>3,575</td><td>2,883</td></tr><tr><td>Other</td><td>14</td><td>-110 (e)</td></tr><tr><td>Allowance for loan losses at December 31</td><td>$7,090(b)</td><td>$7,320(f)</td></tr></table>
<table><tr><td>December 31, (in millions)</td><td>2005</td><td>2004</td><td><sup>(c)</sup></td></tr><tr><td>Allowance for lending-related commitmentsat January 1</td><td>$492</td><td>$324</td><td></td></tr><tr><td>Addition resulting from the Merger, July 1, 2004</td><td>—</td><td>508</td><td></td></tr><tr><td>Provision for lending-related commitments:</td><td></td><td></td><td></td></tr><tr><td>Provision excludingaccounting policy conformity</td><td>-92</td><td>-112</td><td></td></tr><tr><td>Accounting policy conformity<sup>(a)</sup></td><td>—</td><td>-227</td><td></td></tr><tr><td>Total Provision for lending-related commitments</td><td>-92</td><td>-339</td><td></td></tr><tr><td>Other</td><td>—</td><td>-1</td><td></td></tr><tr><td>Allowance for lending-related commitmentsat December 31<sup>(b)</sup></td><td>$400</td><td>$492</td><td></td></tr></table>
<table><tr><td>Year ended December 31,</td><td>Operating earnings</td><td>Return on common equity – goodwill<sup>(c)</sup></td></tr><tr><td>(in millions, except ratios)</td><td>2005</td><td>2004</td><td>Change</td><td>2005</td><td>2004</td></tr><tr><td>Investment Bank</td><td>$3,658</td><td>$2,948</td><td>24%</td><td>18%</td><td>17%</td></tr><tr><td>Retail Financial Services</td><td>3,427</td><td>2,199</td><td>56</td><td>26</td><td>24</td></tr><tr><td>Card Services</td><td>1,907</td><td>1,274</td><td>50</td><td>16</td><td>17</td></tr><tr><td>Commercial Banking</td><td>1,007</td><td>608</td><td>66</td><td>30</td><td>29</td></tr><tr><td>Treasury & Securities Services</td><td>1,037</td><td>440</td><td>136</td><td>55</td><td>17</td></tr><tr><td>Asset & Wealth Management</td><td>1,216</td><td>681</td><td>79</td><td>51</td><td>17</td></tr><tr><td>Corporate</td><td>-1,731</td><td>61</td><td>NM</td><td>NM</td><td>NM</td></tr><tr><td>Total</td><td>$10,521</td><td>$8,211</td><td>28%</td><td>17%</td><td>16%</td></tr></table>
<table><tr><td>December 31,</td><td colspan="2">2005</td><td colspan="2">2004</td></tr><tr><td>(in billions)</td><td>Outstanding</td><td>%</td><td>Outstanding</td><td>%</td></tr><tr><td> Top 10 U.S. States</td><td></td><td></td><td></td><td></td></tr><tr><td>California</td><td>$24.4</td><td>18%</td><td>$22.8</td><td>18%</td></tr><tr><td>New York</td><td>19.5</td><td>15</td><td>18.4</td><td>15</td></tr><tr><td>Florida</td><td>10.3</td><td>8</td><td>7.1</td><td>6</td></tr><tr><td>Illinois</td><td>7.7</td><td>6</td><td>8.0</td><td>6</td></tr><tr><td>Texas</td><td>7.6</td><td>6</td><td>7.9</td><td>6</td></tr><tr><td>Ohio</td><td>6.1</td><td>5</td><td>6.1</td><td>5</td></tr><tr><td>Arizona</td><td>5.8</td><td>4</td><td>5.2</td><td>4</td></tr><tr><td>New Jersey</td><td>5.3</td><td>4</td><td>4.5</td><td>4</td></tr><tr><td>Michigan</td><td>5.2</td><td>4</td><td>5.2</td><td>4</td></tr><tr><td>Colorado</td><td>3.2</td><td>2</td><td>3.2</td><td>3</td></tr><tr><td>Total Top 10</td><td>95.1</td><td>72</td><td>88.4</td><td>71</td></tr><tr><td>Other</td><td>38.4</td><td>28</td><td>36.3</td><td>29</td></tr><tr><td>Total</td><td>$133.5</td><td>100%</td><td>$124.7</td><td>100%</td></tr></table>

Question: What's the sum of the Ohio for Top 10 U.S. States for Outstanding in the years where Allowance for lending-related commitmentsat January 1 is greater than 0? (in billion)
Answer: 12.2