Earnings Per Share

12 Months Ended

Dec. 31, 2012

Earnings Per Share [Abstract]

EARNINGS PER SHARE

Earnings per share

Earnings per share (“EPS”) is calculated under the two-class method under which all earnings (distributed and undistributed) are allocated to each class of common stock and participating securities based on their respective rights to receive dividends. JPMorgan Chase grants restricted stock and RSUs to certain employees under its stock-based compensation programs, which entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock; these unvested awards meet the definition of participating securities. Options issued under employee benefit plans that have an antidilutive effect are excluded from the computation of diluted EPS.

The following table presents the calculation of basic and diluted EPS for the years ended December 31, 2012, 2011 and 2010.

Year ended December 31, (in millions, except per share amounts)	2012		2011		2010
Basic earnings per share
Net income	$	21,284	$	18,976	$	17,370
Less: Preferred stock dividends	653		629		642
Net income applicable to common equity	20,631		18,347		16,728
Less: Dividends and undistributed earnings allocated to participating securities	754		779		964
Net income applicable to common stockholders	$	19,877	$	17,568	$	15,764
Total weighted-average basic shares outstanding	3,809.4		3,900.4		3,956.3
Net income per share	$	5.22	$	4.50	$	3.98
Diluted earnings per share
Net income applicable to common stockholders	$	19,877	$	17,568	$	15,764
Total weighted-average basic shares outstanding	3,809.4		3,900.4		3,956.3
Add: Employee stock options, SARs and warrants(a)	12.8		19.9		20.6
Total weighted-average diluted shares outstanding(b)	3,822.2		3,920.3		3,976.9
Net income per share	$	5.20	$	4.48	$	3.96

(a) Excluded from the computation of diluted EPS (due to the antidilutive effect) were options issued under employee benefit plans and the warrants originally issued in 2008 under the U.S. Treasury’s Capital Purchase Program to purchase shares of the Firm’s common stock. The aggregate number of shares issuable upon the exercise of such options and warrants was 148 million, 133 million and 233 million for the full years ended December 31, 2012, 2011 and 2010 respectively.

(b) Participating securities were included in the calculation of diluted EPS using the two-class method, as this computation was more dilutive than the calculation using the treasury stock method.