8-KOther Events

JPMORGAN CHASE & CO 8-K Report, Corporate Update (May 29, 2009)

Filed May 29, 2009For Securities:JPMJPM-PCJPM-PDJPM-PKJPM-PLJPM-PMJPM-PJAMJBVYLD

Summary

JPMorgan Chase & Co. (JPM) filed this 8-K to announce a revision in how Earnings Per Share (EPS) is presented in its 2008 Annual Report (10-K). This change is due to the adoption of a new accounting standard, FASB Staff Position EITF 03-6-1, which clarifies that certain unvested stock-based compensation awards with nonforfeitable dividend rights are now considered 'participating securities'. Consequently, these awards must be included in the EPS calculation using the two-class method. While this revision affects the reported EPS figures for historical periods, it is important to note that it did not impact JPMorgan Chase's net income, financial position, or regulatory capital. The company is retroactively applying this change effective January 1, 2009, and the revised EPS data will be reflected in future filings. Investors should be aware of this change in EPS presentation to ensure accurate comparison of historical and future financial performance metrics.

Key Highlights

  • 1JPMorgan Chase is revising its previously reported EPS figures in its 2008 10-K.
  • 2The revision is driven by the adoption of FASB Staff Position EITF 03-6-1 concerning the accounting for share-based payments.
  • 3Unvested stock-based awards with dividend rights are now classified as 'participating securities'.
  • 4These participating securities will be included in the two-class method for calculating EPS.
  • 5The adoption of this standard did not affect JPM's net income, financial position, or regulatory capital.
  • 6The change is applied retrospectively for periods beginning January 1, 2009, and will be reflected in future filings.
  • 7Basic and Diluted EPS for years 2004-2008 have been restated downwards under both 'as reported' and 'as revised' categories.

Frequently Asked Questions

JPMorgan Chase is filing this 8-K to announce a revision to the presentation of its Earnings Per Share (EPS) in its 2008 Annual Report (10-K). This revision is necessary due to the adoption of a new accounting standard (FSP EITF 03-6-1) that changes how certain stock-based compensation awards are treated in EPS calculations.

The new standard classifies unvested stock-based awards that have nonforfeitable rights to dividends or dividend equivalents as 'participating securities'. These participating securities are now included in the calculation of EPS using the two-class method, which allocates earnings to common shares and participating securities based on their dividend rights.

No, the adoption of this accounting standard did not affect JPMorgan Chase's net income, financial position, or regulatory capital. It only changes the method of presentation for EPS, leading to restated EPS figures for historical periods.

The revised EPS figures, as presented in the filing, are lower than the originally reported amounts for the years 2004 through 2008. This is because the inclusion of participating securities in the EPS calculation dilutes the EPS for common shareholders.