Earnings Per Share

12 Months Ended

Dec. 31, 2018

Earnings per share

Basic earnings per share (“EPS”) is calculated using the two-class method. Dilutive EPS is calculated under both the two-class and treasury stock methods, and the more dilutive amount is reported. Under the two-class method, 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 RSUs under its share-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. Accordingly, these RSUs are treated as a separate class of securities in computing basic EPS, and are not included as incremental shares in computing dilutive EPS; refer to Note 9 for additional information. For each of the periods presented diluted EPS calculated under the two-class method was more dilutive.

The following table presents the calculation of basic and diluted EPS for the years ended December 31, 2018, 2017 and 2016.



Year ended December 31, (in millions, except per share amounts)	2018		2017		2016
Basic earnings per share
Net income	$	32,474	$	24,441	$	24,733
Less: Preferred stock dividends	1,551		1,663		1,647
Net income applicable to common equity	30,923		22,778		23,086
Less: Dividends and undistributed earnings allocated to participating securities	214		211		252
Net income applicable to common stockholders	$	30,709	$	22,567	$	22,834

Total weighted-average basic shares outstanding	3,396.4		3,551.6		3,658.8
Net income per share	$	9.04	$	6.35	$	6.24

Diluted earnings per share
Net income applicable to common stockholders	$	30,709	$	22,567	$	22,834

Total weighted-average basic shares outstanding	3,396.4		3,551.6		3,658.8
Add: Employee stock options, SARs, warrants and unvested PSUs	17.6		25.2		31.2
Total weighted-average diluted shares outstanding	3,414.0		3,576.8		3,690.0
Net income per share	$	9.00	$	6.31	$	6.19