2004 Annual Report: Financial Review: Statements and Notes: Consolidated Statement of Cash Flows

Consolidated Statement of Cash Flows

	Year Ended December 31, 2004	Year Ended December 31, 2003	Year Ended December 31, 2002
	Year Ended December 31
(Dollars in millions)	2004	2003	2002
Operating activities
Net income	$  14,143	$ 10,810	$  9,249
Reconciliation of net income to net cash provided by (used in) operating activities:
Provision for credit losses	2,769	2,839	3,697
Gains on sales of debt securities	(2,123)	(941)	(630)
Depreciation and premises improvements amortization	972	890	886
Amortization of intangibles	664	217	218
Deferred income tax benefit	(402)	(263)	(444)
Net increase in trading and hedging instruments	(13,180)	(13,153)	(13,133)
Net (increase) decrease in other assets	(11,928)	10,647	(2,345)
Net increase (decrease) in accrued expenses and other liabilities	4,583	12,067	(11,019)
Other operating activities, net	547	37	2,837
Net cash provided by (used in) operating activities	(3,955)	23,150	(10,684)
Investing activities
Net increase in time deposits placed and other short-term investments	(1,147)	(1,238)	(881)
Net increase in federal funds sold and securities purchased under   agreements to resell	(3,880)	(31,614)	(16,770)
Proceeds from sales of available-for-sale securities	107,107	171,711	137,702
Proceeds from maturities of available-for-sale securities	26,973	26,953	26,777
Purchases of available-for-sale securities	(232,609)	(195,852)	(145,962)
Proceeds from maturities of held-to-maturity securities	153	779	43
Proceeds from sales of loans and leases	4,416	32,672	28,068
Other changes in loans and leases, net	(32,344)	(74,202)	(37,184)
Originations and purchases of mortgage servicing rights	(1,075)	(1,690)	(900)
Net purchases of premises and equipment	(863)	(209)	(939)
Proceeds from sales of foreclosed properties	198	247	142
Investment in unconsolidated subsidiary	-	(1,600)	-
Cash equivalents acquired net of purchase acquisitions	4,953	(140)	(110)
Other investing activities, net	986	898	2,676
Net cash used in investing activities	(127,132)	(73,285)	(7,338)
Financing activities
Net increase in deposits	64,423	27,655	12,963
Net increase in federal funds purchased and securities   sold under agreements to repurchase	35,752	12,967	17,352
Net increase (decrease) in commercial paper and other short-term borrowings	37,437	13,917	(790)
Proceeds from issuance of long-term debt	21,289	16,963	10,850
Retirement of long-term debt	(16,904)	(9,282)	(15,364)
Proceeds from issuance of common stock	3,723	3,970	2,373
Common stock repurchased	(6,286)	(9,766)	(7,466)
Cash dividends paid	(6,468)	(4,281)	(3,709)
Other financing activities, net	(91)	(72)	(66)
Net cash provided by financing activities	132,875	52,071	16,143
Effect of exchange rate changes on cash and cash equivalents	64	175	15
Net increase (decrease) in cash and cash equivalents	1,852	2,111	(1,864)
Cash and cash equivalents at January 1	27,084	24,973	26,837
Cash and cash equivalents at December 31	$  28,936	$ 27,084	$ 24,973
Supplemental cash flow disclosures
Cash paid for interest	$  13,765	$ 10,214	$ 11,253
Cash paid for income taxes	5,754	3,870	3,999
Assets and liabilities of a certain multi-seller asset-backed commercial paper conduit that was consolidated amounted to $4,350 in 2003. Net transfers of Loans and Leases from loans held-for-sale (included in Other Assets) to the loan portfolio for Asset and Liability Manangement (ALM) purposes amounted to $1,106, $9,683 and $8,468 in 2004, 2003 and 2002, respectively. The fair values of noncash assets acquired and liabilities assumed in the merger with FleetBoston were $224,492 and $182,862, respectively. Approximately 1.2 billion shares of common stock, valued at approximately $45,622, were issued in connection with the merger with FleetBoston. See accompanying Notes to Consolidated Financial Statements.