Earnings Per Share

12 Months Ended

Dec. 31, 2016

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.

The following table presents the calculation of basic and diluted EPS for the years ended December 31, 2016, 2015 and 2014.



Year ended December 31, (in millions, except per share amounts)	2016		2015		2014
Basic earnings per share
Net income	$	24,733	$	24,442	$	21,745
Less: Preferred stock dividends	1,647		1,515		1,125
Net income applicable to common equity	23,086		22,927		20,620
Less: Dividends and undistributed earnings allocated to participating securities	503		521		543
Net income applicable to common stockholders	$	22,583	$	22,406	$	20,077

Total weighted-average basic shares outstanding	3,618.5		3,700.4		3,763.5
Net income per share	$	6.24	$	6.05	$	5.33

Diluted earnings per share
Net income applicable to common stockholders	$	22,583	$	22,406	$	20,077

Total weighted-average basic shares outstanding	3,618.5		3,700.4		3,763.5
Add: Employee stock options, SARs, warrants and PSUs^(a)	31.3		32.4		34.0
Total weighted-average diluted shares outstanding^(b)	3,649.8		3,732.8		3,797.5
Net income per share	$	6.19	$	6.00	$	5.29


(a)	Excluded from the computation of diluted EPS (due to the antidilutive effect) were certain options issued under employee benefit plans. The aggregate number of shares issuable upon the exercise of such options was not material for the years ended December 31, 2016 and 2015 and were 1 million for the year ended December 31, 2014.


(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.