JP Morgan Chase 2015 Annual Report Download - page 293

JPMorgan Chase & Co./2015 Annual Report 283
At December 31, 2015, 2014, and 2013, respectively, the
Firm had 47.4 million, 59.8 million and 59.8 million
warrants outstanding to purchase shares of common stock
(the “Warrants”). The Warrants are currently traded on the
New York Stock Exchange, and they are exercisable, in
whole or in part, at any time and from time to time until
October 28, 2018. The original warrant exercise price was
$42.42 per share. The number of shares issuable upon the
exercise of each warrant and the warrant exercise price is
subject to adjustment upon the occurrence of certain
events, including, but not limited to, the extent to which
regular quarterly cash dividends exceed $0.38 per share.
As a result of the Firm’s quarterly common stock dividend
exceeding $0.38 per share commencing with the second
quarter of 2014, the exercise price of the Warrants has
been adjusted each subsequent quarter, and was $42.284
as of December 31, 2015. There has been no change in the
number of shares issuable upon exercise.
On March 11, 2015, in conjunction with the Federal
Reserve’s release of its 2015 Comprehensive Capital
Analysis and Review (“CCAR”) results, the Firm’s Board of
Directors has authorized a $6.4 billion common equity (i.e.,
common stock and warrants) repurchase program. As of
December 31, 2015, $2.7 billion (on a settlement-date
basis) of authorized repurchase capacity remained under
the program. This authorization includes shares
repurchased to offset issuances under the Firm’s equity-
based compensation plans.
The following table sets forth the Firm’s repurchases of
common equity for the years ended December 31, 2015,
2014 and 2013, on a settlement-date basis. There were no
warrants repurchased during the years ended
December 31, 2015, 2014 and 2013.
Year ended December 31, (in millions) 2015 2014 2013
Total number of shares of common stock
repurchased 89.8 82.3 96.1
Aggregate purchase price of common
stock repurchases $ 5,616 $ 4,760 $ 4,789
The Firm may, from time to time, enter into written trading
plans under Rule 10b5-1 of the Securities Exchange Act of
1934 to facilitate repurchases in accordance with the
common equity repurchase program. A Rule 10b5-1
repurchase plan allows the Firm to repurchase its equity
during periods when it would not otherwise be repurchasing
common equity — for example, during internal trading
“blackout periods.” All purchases under a Rule 10b5-1 plan
must be made according to a predefined plan established
when the Firm is not aware of material nonpublic
information. For additional information regarding
repurchases of the Firm’s equity securities, see Part II,
Item 5: Market for registrant’s common equity, related
stockholder matters and issuer purchases of equity
securities, on page 20.
As of December 31, 2015, approximately 195 million
unissued shares of common stock were reserved for
issuance under various employee incentive, compensation,
option and stock purchase plans, director compensation
plans, and the Warrants, as discussed above.
Note 24 – 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, 2015, 2014
and 2013.
Year ended December 31,
(in millions,
except per share amounts) 2015 2014 2013
Basic earnings per share
Net income $ 24,442 $ 21,745 $ 17,886
Less: Preferred stock dividends 1,515 1,125 805
Net income applicable to common
equity 22,927 20,620 17,081
Less: Dividends and undistributed
earnings allocated to participating
securities 521 543 524
Net income applicable to common
stockholders $ 22,406 $ 20,077 $ 16,557
Total weighted-average basic
shares outstanding 3,700.4 3,763.5 3,782.4
Net income per share $ 6.05 $ 5.33 $ 4.38
Diluted earnings per share
Net income applicable to common
stockholders $ 22,406 $ 20,077 $ 16,557
Total weighted-average basic shares
outstanding 3,700.4 3,763.5 3,782.4
Add: Employee stock options, SARs
and warrants(a) 32.4 34.0 32.5
Total weighted-average diluted
shares outstanding(b) 3,732.8 3,797.5 3,814.9
Net income per share $ 6.00 $ 5.29 $ 4.34
(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 year ended December 31, 2015, and 1 million and 6 million for the years
ended December 31, 2014 and 2013, 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.