On October 22, 2004, the American Jobs Creation Act of 2004 (the “Act”) was signed into law.
The Act creates a temporary incentive for U. S.  companies to repatriate accumulated foreign earnings at a substantially reduced U. S.  effective tax rate by providing a dividends received deduction on the repatriation of certain foreign earnings to the U. S.  taxpayer (the “repatriation provision”).
The new deduction is subject to a number of limitations and requirements.
In the fourth quarter of 2005, the Firm applied the repatriation provision to $1.9 billion of cash from foreign earnings, resulting in a net tax benefit of $55 million.
The $1.9 billion of cash will be used in accordance with the Firm’s domestic reinvestment plan pursuant to the guidelines set forth in the Act.
The tax expense (benefit) applicable to securities gains and losses for the years 2005, 2004 and 2003 was $(536) million, $126 million and $477 million, respectively.
A reconciliation of the applicable statutory U. S.  income tax rate to the effective tax rate for the past three years is shown in the following table:
## Table 0 ##
(a) 2004 results include six months of the combined Firm’s results and six months of heritage JPMorgan Chase results.2003 reflects the results of heritage JPMorgan Chase only.
(b) The lower rate in 2004 was attributable to changes in the proportion of income subject to different state and local taxes.
The following table presents the U. S.  and non-U.
S.  components of income before income tax expense:
## Table 1 ##
(a) 2004 results include six months of the combined Firm’s results and six months of heritage JPMorgan Chase results.2003 reflects the results of heritage JPMorgan Chase only.
(b) For purposes of this table, non-U.
S.  income is defined as income generated from operations located outside the United States of America.
Note 23 – Restrictions on cash and intercompany funds transfers JPMorgan Chase Bank’s business is subject to examination and regulation by the Office of the Comptroller of the Currency (“OCC”).
The Bank is a member of the Federal Reserve System and its deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”).
The Federal Reserve Board requires depository institutions to maintain cash reserves with a Federal Reserve Bank.
The average amount of reserve balances deposited by the Firm’s bank subsidiaries with various Federal Reserve Banks was approximately $2.7 billion in 2005 and $3.8 billion in 2004.
Restrictions imposed by federal law prohibit JPMorgan Chase and certain other affiliates from borrowing from banking subsidiaries unless the loans are secured in specified amounts.
Such secured loans to the Firm or to other affiliates are generally limited to 10% of the banking subsidiary’s total capital, as determined by the risk-based capital guidelines; the aggregate amount of all such loans is limited to 20% of the banking subsidiary’s total capital.
The principal sources of JPMorgan Chase’s income (on a parent company-only basis) are dividends and interest from JPMorgan Chase Bank and the other banking and nonbanking subsidiaries of JPMorgan Chase.
In addition to dividend restrictions set forth in statutes and regulations, the FRB, the OCC and the FDIC have authority under the Financial Institutions Supervisory Act to prohibit or to limit the payment of dividends by the banking organizations they supervise, including JPMorgan Chase and its subsidiaries that are banks or bank holding companies, if, in the banking regulator’s opinion, payment of a dividend would constitute an unsafe or unsound practice in light of the financial condition of the banking organization.
At January 1, 2006 and 2005, JPMorgan Chase’s bank subsidiaries could pay, in the aggregate, $7.4 billion and $6.2 billion, respectively, in dividends to their respective bank holding companies without prior approval of their relevant banking regulators.
Dividend capacity in 2006 will be supplemented by the banks’ earnings during the year.
In compliance with rules and regulations established by U. S.  and non-U.
S.  regulators, as of December 31, 2005 and 2004, cash in the amount of $6.4 billion and $4.3 billion, respectively, and securities with a fair value of $2.1 billion and $2.7 billion, respectively, were segregated in special bank accounts for the benefit of securities and futures brokerage customers.
Note 24 – Capital There are two categories of risk-based capital: Tier 1 capital and Tier 2 capital.
Tier 1 capital includes common stockholders’ equity, qualifying preferred stock and minority interest less goodwill and other adjustments.
Tier 2 capital consists of preferred stock not qualifying as Tier 1, subordinated long-term debt and other instruments qualifying as Tier 2, and the aggregate allowance for credit losses up to a certain percentage of risk-weighted assets.
Total regulatory capital is subject to deductions for investments in certain subsidiaries.
Under the risk-based capital guidelines of the FRB, JPMorgan Chase is required to maintain minimum ratios of Tier 1 and Total (Tier 1 plus Tier 2) capital to riskweighted assets, as well as minimum leverage ratios (which are defined as Tier 1 capital to average adjusted on–balance sheet assets).
Failure to meet these minimum requirements could cause the FRB to take action.
Bank subsidiaries also are subject to these capital requirements by their respective primary regulators.
As of December 31, 2005 and 2004, JPMorgan Chase and all of its banking subsidiaries were well-capitalized and met all capital requirements to which each was subject.
Litigation reserve The Firm maintains litigation reserves for certain of its litigations, including its material legal proceedings.
While the outcome of litigation is inherently uncertain, management believes, in light of all information known to it at December 31, 2005, that the Firm’s litigation reserves were adequate at such date.
Management reviews litigation reserves periodically, and the reserves may be increased or decreased in the future to reflect further litigation developments.
The Firm believes it has meritorious defenses to claims asserted against it in its currently outstanding litigation and, with respect to such litigation, intends to continue to defend itself vigorously, litigating or settling cases according to management’s judgment as to what is in the best interest of stockholders.
Note 26 – Accounting for derivative instruments and hedging activities Derivative instruments enable end users to increase, reduce or alter exposure to credit or market risks.
The value of a derivative is derived from its reference to an underlying variable or combination of variables such as equity, foreign exchange, credit, commodity or interest rate prices or indices.
JPMorgan Chase makes markets in derivatives for customers and also is an end-user of derivatives in order to manage the Firm’s exposure to credit and market risks.
SFAS 133, as amended by SFAS 138 and SFAS 149, establishes accounting and reporting standards for derivative instruments, including those used for trading and hedging activities, and derivative instruments embedded in other contracts.
All free-standing derivatives, whether designated for hedging relationships or not, are required to be recorded on the balance sheet at fair value.
The accounting for changes in value of a derivative depends on whether the contract is for trading purposes or has been designated and qualifies for hedge accounting.
The majority of the Firm’s derivatives are entered into for trading purposes.
The Firm also uses derivatives as an end user to hedge market exposures, modify the interest rate characteristics of related balance sheet instruments or meet longer-term investment objectives.
Both trading and end-user derivatives are recorded at fair value in Trading assets and Trading liabilities as set forth in Note 3 on page 94 of this Annual Report.
In order to qualify for hedge accounting, a derivative must be considered highly effective at reducing the risk associated with the exposure being hedged.
Each derivative must be designated as a hedge, with documentation of the risk management objective and strategy, including identification of the hedging instrument, the hedged item and the risk exposure, and how effectiveness is to be assessed prospectively and retrospectively.
The extent to which a hedging instrument is effective at achieving offsetting changes in fair value or cash flows must be assessed at least quarterly.
Any ineffectiveness must be reported in current-period earnings.
For qualifying fair value hedges, all changes in the fair value of the derivative and in the fair value of the item for the risk being hedged are recognized in earnings.
If the hedge relationship is terminated, then the fair value adjustment to the hedged item continues to be reported as part of the basis of the item and is amortized to earnings as a yield adjustment.
For qualifying cash flow hedges, the effective portion of the change in the fair value of the derivative is recorded in Other comprehensive income and recognized in the income statement when the hedged cash flows affect earnings.
The ineffective portions of cash flow hedges are immediately recognized in earnings.
If the hedge relationship is terminated, then the change in fair value of the derivative recorded in Other comprehensive income is recognized when the cash flows that were hedged occur, consistent with the original hedge strategy.
For hedge relationships discontinued because the forecasted transaction is not expected to occur according to the original strategy, any related derivative amounts recorded in Other comprehensive income are immediately recognized in earnings.
For qualifying net investment hedges, changes in the fair value of the derivative or the revaluation of the foreign currency–denominated debt instrument are recorded in the translation adjustments account within Other comprehensive income.
Any ineffective portions of net investment hedges are immediately recognized in earnings.
JPMorgan Chase’s fair value hedges primarily include hedges of fixed-rate long-term debt, loans, AFS securities and MSRs.
Interest rate swaps are the most common type of derivative contract used to modify exposure to interest rate risk, converting fixed-rate assets and liabilities to a floating rate.
Interest rate options, swaptions and forwards are also used in combination with interest rate swaps to hedge the fair value of the Firm’s MSRs.
For a further discussion of MSR risk management activities, see Note 15 on pages 114–116 of this Annual Report.
All amounts have been included in earnings consistent with the classification of the hedged item, primarily Net interest income, Mortgage fees and related income, and Other income.
The Firm did not recognize any gains or losses during 2005 on firm commitments that no longer qualify as fair value hedges.
JPMorgan Chase also enters into derivative contracts to hedge exposure to variability in cash flows from floating-rate financial instruments and forecasted transactions, primarily the rollover of short-term assets and liabilities, and foreign currency-denominated revenues and expenses.
Interest rate swaps, futures and forward contracts are the most common instruments used to reduce the impact of interest rate and foreign exchange rate changes on future earnings.
All amounts affecting earnings have been recognized consistent with the classification of the hedged item, primarily Net interest income.
The Firm uses forward foreign exchange contracts and foreign currencydenominated debt instruments to protect the value of net investments in foreign currencies in non-U.
S.  subsidiaries.
The portion of the hedging instruments excluded from the assessment of hedge effectiveness (forward points) is recorded in Net interest income.
The following table presents derivative instrument hedging-related activities for the periods indicated:
## Table 2 ##
(a) 2004 results include six months of the combined Firm’s results and six months of heritage JPMorgan Chase results.
(b) Includes ineffectiveness and the components of hedging instruments that have been excluded from the assessment of hedge effectiveness.
Over the next 12 months, it is expected that $44 million (after-tax) of net gains recorded in Other comprehensive income at December 31, 2005, will be recognized in earnings.
The maximum length of time over which forecasted transactions are hedged is 10 years, and such transactions primarily relate to core lending and borrowing activities.
JPMorgan Chase does not seek to apply hedge accounting to all of the Firm’s economic hedges.
For example, the Firm does not apply hedge accounting to standard credit derivatives used to manage the credit risk of loans and commitments because of the difficulties in qualifying such contracts as hedges under SFAS 133.
Similarly, the Firm does not apply hedge accounting to certain interest rate derivatives used as economic hedges.
## Table 3 ##
(a) For pension benefit plans, the unrecognized net loss is primarily the result of declines in interest rates in recent years, as offset by recent asset gains and amounts recognized through amortization in expense.
Other factors that contribute to this unrecognized amount include demographic experience, which differs from expected, and changes in other actuarial assumptions.
For other postretirement benefit plans, the primary drivers of the cumulative unrecognized loss was the decline in the discount rate in recent years and the medical trend, which was higher than expected.
These losses have been offset somewhat by the recognition of future savings attributable to Medicare Part D subsidy payments.
(b) Effective July 1, 2004, the Firm assumed the obligations of heritage Bank One’s pension and postretirement plans.
These plans were similar to those of JPMorgan Chase and were merged into the Firm’s plans effective December 31, 2004.
(c) The Medicare Prescription Drug, Improvement and Modernization Act of 2003 resulted in a $35 million reduction in the Accumulated other postretirement benefit obligation as of January 1, 2004.
During 2005, an additional $116 million reduction was reflected for recognition of the final Medicare Part D regulations issued on January 21, 2005.
(d) Includes postretirement benefit obligation of $44 million and $43 million and postretirement benefit liability (included in Accrued expenses) of $50 million and $57 million at December 31, 2005 and 2004, respectively, for the U. K.  plan, which is unfunded.
(e) At December 31, 2005 and 2004, approximately $405 million and $358 million, respectively, of U. S.  plan assets relate to surplus assets of group annuity contracts.
(f) At December 31,2005 and 2004,Accrued expenses related to non-U.
S. defined benefit pension plans that JPMorgan Chase elected not to prefund fully totaled $164 million and $124 million,respectively.
## Table 4 ##
(a) Effective July 1, 2004, the Firm assumed the obligations of heritage Bank One’s pension and postretirement plans.
These plans were similar to those of JPMorgan Chase and were merged into the Firm’s plans effective December 31, 2004.
(b) Heritage JPMorgan Chase results only for 2003.
(c) The Medicare Prescription Drug, Improvement and Modernization Act of 2003 resulted in a $15 million and $5 million reduction in 2005 and 2004, respectively, in net periodic benefit cost.
The impact on 2005 cost was higher as a result of the final Medicare Part D regulations issued on January 21, 20

['

Year ended December 31,(a)	2005	2004	2003
Statutory U.S. federal tax rate	35.0%	35.0%	35.0%
Increase (decrease) in tax rate resulting from:
U.S. state and local income taxes, net offederal income tax benefit	1.6	0.6(b)	2.1
Tax-exempt income	-3.0	-4.1	-2.4
Non-U.S. subsidiary earnings	-1.4	-1.3	-0.7
Business tax credits	-3.6	-4.1	-0.9
Other, net	2.0	1.8	-0.1
Effective tax rate	30.6%	27.9%	33.0%

', '

Year ended December 31, (in millions)(a)	2005	2004	2003
U.S.	$8,959	$3,817	$7,333
Non-U.S.(b)	3,256	2,377	2,695
Income before income tax expense	$12,215	$6,194	$10,028

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Year ended December 31, (in millions)(a)	2005	2004
Fair value hedge ineffective net gains/(losses)(b)	$-58	$199
Cash flow hedge ineffective net gains/(losses)(b)	-2	—
Cash flow hedging gains on forecastedtransactions that failed to occur	—	1

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Defined benefit pension plans
U.S.	Non-U.S.	Other postretirement benefit plans (c)(d)
December 31, (in millions)	2005	2004(b)	2005	2004(b)	2005	2004(b)
Change in benefit obligation
Benefit obligation at beginning of year	$-7,594	$-4,633	$-1,969	$-1,659	$-1,577	$-1,252
Merger with Bank One	—	-2,497	—	-25	—	-216
Cazenove business partnership	—	—	-291	—	—	—
Benefits earned during the year	-280	-251	-25	-17	-13	-15
Interest cost on benefit obligations	-431	-348	-104	-87	-81	-81
Plan amendments	—	70	—	—	117	32
Employee contributions	—	—	—	—	-44	-36
Actuarial gain (loss)	-122	-511	-310	-99	21	-163
Benefits paid	723	555	66	64	187	167
Curtailments	28	21	—	—	-9	-8
Special termination benefits	—	—	—	-12	-1	-2
Foreign exchange impact and other	—	—	255	-134	5	-3
Benefit obligation at end of year	$-7,676	$-7,594	$-2,378	$-1,969	$-1,395	$-1,577
Change in plan assets
Fair value of plan assets at beginning of year	$9,637	$4,866	$1,889	$1,603	$1,302	$1,149
Merger with Bank One	—	3,280	—	20	—	98
Cazenove business partnership	—	—	252	—	—	—
Actual return on plan assets	703	946	308	164	43	84
Firm contributions	—	1,100	78	40	3	2
Benefits paid	-723	-555	-66	-64	-19	-31
Foreign exchange impact and other	—	—	-238	126	—	—
Fair value of plan assets at end of year	$9,617(e)	$9,637(e)	$2,223	$1,889	$1,329	$1,302
Reconciliation of funded status
Funded status	$1,941	$2,043	$-155	$-80	$-66	$-275
Unrecognized amounts:(a)
Net transition asset	—	—	—	-1	—	—
Prior service cost	40	47	3	4	-105	-23
Net actuarial loss	1,078	997	599	590	335	321
Prepaid benefit cost reported in Other assets	$3,059	$3,087	$447(f)	$513(f)	$164	$23
Accumulated benefit obligation	$-7,274	$-7,167	$-2,303	$-1,931	NA	NA

', '

Defined benefit pension plans
U.S.	Non-U.S.	Other postretirement benefit plans
For the year ended December 31, (in millions)	2005	2004(a)	2003(b)	2005	2004(a)	2003(b)	2005(c)	2004(a) (c)	2003(b)
Components of net periodic benefit cost
Benefits earned during the period	$280	$251	$180	$25	$17	$16	$13	$15	$15
Interest cost on benefitobligations	431	348	262	104	87	74	81	81	73
Expected return on plan assets	-694	-556	-322	-109	-90	-83	-90	-86	-92
Amortization of unrecognizedamounts:
Prior service cost	5	13	6	1	1	—	-10	—	1
Net actuarial loss	4	23	62	38	44	35	12	—	—
Curtailment (gain) loss	2	7	2	—	—	8	-17	8	2
Settlement (gain) loss	—	—	—	—	-1	—	—	—	—
Special termination benefits	—	—	—	—	11	—	1	2	—
Reported net periodic benefit costs	$28	$86	$190	$59	$69	$50	$-10	$20	$-1

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Question: Which year is Fair value of plan assets at beginning of year for Non-U.S. the most?
Answer: 2005