Business Context and Reporting Period
This Form 8-K, dated May 29, 2009, is filed by JPMorgan Chase & Co. to revise the presentation of earnings per share (EPS) in the selected financial data tables of its Annual Report on Form 10-K for the year ended December 31, 2008. The revision reflects the retrospective adoption of FASB Staff Position EITF 03-6-1, effective January 1, 2009, which requires unvested stock-based compensation awards with nonforfeitable dividend rights to be treated as participating securities in the two-class method calculation of EPS.
Key Financial Metrics
The filing does not report new revenue, profit, cash flow, debt, or liquidity figures. It specifically states that the adoption of the new accounting standard did not affect JPMorgan Chase's net income, financial position, or regulatory capital for any reported period. The only metrics updated are EPS figures for the years 2004 through 2008.
| Year Ended Dec 31 | 2008 | 2007 | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|
| Basic EPS - Income from Continuing Ops | |||||
| As Reported | $0.86 | $4.51 | $3.93 | $2.36 | $1.51 |
| As Revised | $0.81 | $4.38 | $3.83 | $2.30 | $1.47 |
| Basic EPS - Net Income | |||||
| As Reported | $1.41 | $4.51 | $4.16 | $2.43 | $1.59 |
| As Revised | $1.35 | $4.38 | $4.05 | $2.37 | $1.54 |
| Diluted EPS - Income from Continuing Ops | |||||
| As Reported | $0.84 | $4.38 | $3.82 | $2.32 | $1.48 |
| As Revised | $0.81 | $4.33 | $3.78 | $2.29 | $1.45 |
| Diluted EPS - Net Income | |||||
| As Reported | $1.37 | $4.38 | $4.04 | $2.38 | $1.55 |
| As Revised | $1.35 | $4.33 | $4.00 | $2.35 | $1.52 |
Material Changes Versus Prior Period
The material change is a downward revision to reported EPS figures for fiscal years 2004 through 2008 due to the inclusion of participating securities in the denominator of the EPS calculation. For the year ended December 31, 2008, Basic EPS for Net Income decreased from $1.41 to $1.35, and Diluted EPS for Net Income decreased from $1.37 to $1.35. Similar reductions apply to prior years.
Guidance, Outlook, and Risks
The filing contains no new guidance, outlook, or management commentary regarding future performance. It explicitly states that, except for the EPS revisions, the firm has not updated its disclosures in the 2008 10-K to reflect events or developments occurring subsequent to the original filing date. No new risks or contingencies are identified in this report.
Key Facts for Investor Verification
- The revision is a presentation change only; it does not alter the company's reported net income or financial position.
- The change is driven by FASB Staff Position EITF 03-6-1 regarding the treatment of unvested stock-based compensation awards as participating securities.
- Revised EPS figures will be used in all future filings, replacing the previously reported "as reported" numbers.
- Investors should verify that their historical performance models have been updated to reflect the "as revised" EPS data for 2004-2008.