8-KOther EventsExhibits & Filings

FAIR ISAAC CORP 8-K Report, Corporate Update (Feb 25, 2005)

Filed February 25, 2005For Securities:FICO

Summary

Fair Isaac Corporation (FICO) filed an 8-K on February 25, 2005, to disclose the adoption of the Emerging Issues Task Force (EITF) consensus for Issue No. 04-08, which impacts the calculation of diluted Earnings Per Share (EPS) for instruments with contingent conversion features. This change requires FICO to consider shares issuable from its 1.5% senior convertible notes in its diluted EPS calculations, regardless of whether the market price conversion triggers have been met. The company has retroactively restated its prior-period EPS calculations to conform to this new guidance. This adjustment primarily includes approximately 9.1 million shares issuable upon conversion of the senior convertible notes for all periods after August 2003. Investors should note that this is an accounting change and does not represent new debt or equity issuance at this time, but it will affect how diluted EPS is reported going forward.

Key Highlights

  • 1FICO adopted EITF Issue No. 04-08 impacting diluted EPS calculations.
  • 2Contingently convertible instruments based on stock price must now be considered for diluted EPS.
  • 3Approximately 9.1 million shares from 1.5% senior convertible notes are now included in diluted EPS calculations.
  • 4Prior-period EPS calculations have been restated for comparative purposes.
  • 5This change applies to all periods after August 2003.
  • 6The filing includes amended audited financial statements as of September 30, 2004, and for the three years ended September 30, 2004.

Frequently Asked Questions

EITF Issue No. 04-08 requires companies to include shares from convertible instruments with market-price-contingent conversion features in their diluted Earnings Per Share (EPS) calculations, even if the conversion triggers haven't been met. For FICO, this means their 1.5% senior convertible notes are now factored into diluted EPS.

No, this filing is an accounting update and does not represent the issuance of new shares or debt. It's a change in how existing convertible notes impact the calculation of diluted EPS.

The inclusion of approximately 9.1 million potential shares from the convertible notes will likely reduce FICO's reported diluted EPS for all periods after August 2003, as the denominator in the EPS calculation increases.

FICO restated prior-period EPS to conform to the new accounting guidance under EITF Issue No. 04-08, ensuring that its financial reporting is consistent and comparable across periods presented.