When an earnings release leads with higher adjusted EPS, write down reported net income for both periods. The worksheet below separates the change in reported earnings from the change in adjustments.
1. Open the reconciliation for the matching period
Choose the actual results column for the quarter or fiscal year you are reviewing. Start an adjusted net-income bridge with reported net income on the same basis. For adjusted diluted EPS, locate the diluted EPS reconciliation and its share count. Keep any scope qualifier, such as continuing operations or earnings attributable to the parent, with the figures.
2. Copy the signs and the tax effect
This fictional example uses comparable consolidated fiscal years. Earnings and adjustments are in millions of one currency, with share counts in millions. Add excluded expenses and subtract excluded gains. In this example the tax effect is negative. Use the sign and explanation given in each actual filing.
| Line item | Previous year | Current year |
|---|---|---|
| Reported net income | 80 | 76 |
| Add back stock compensation | +12 | +28 |
| Add back restructuring expense | +8 | +14 |
| Subtract excluded gain | 0 | -6 |
| Tax effect | -5 | -8 |
| Adjusted net income | 95 | 104 |
| Diluted weighted-average shares for adjusted EPS | 40 | 38 |
| Adjusted diluted EPS | 2.38 | 2.74 |
Check the current year with 76 + 28 + 14 − 6 − 8 = 104. Omitting the tax line gives 112. SEC staff interpretation 102.11 discusses presenting and explaining income-tax adjustments separately. SEC non-GAAP guidance
3. Reconcile the change across both periods
Reported net income fell by 4, from 80 to 76. Adjusted net income rose by 9, from 95 to 104. Net adjustments increased by 13, from 15 to 28, so −4 + 13 = +9. Read the restructuring descriptions for both years and check whether the charges are comparable or the company changed its exclusion criteria.
4. Recompute EPS using the disclosed denominator
Current adjusted diluted EPS is 104 / 38 ≈ 2.74. Using the previous share count of 40 gives 2.60. Check the diluted weighted-average share counts used for reported and adjusted EPS in the release. Record any small rounding residual when checking against published EPS with rounded amounts or per-share adjustments.
5. Locate the relevant rows and footnote in an actual filing
Open Salesforce’s February 26, 2025 results exhibit and find the net-income reconciliation. Select the fiscal year ended January 31, 2025. Read the amortization, stock compensation, restructuring and tax rows, then look below for the diluted EPS reconciliation and the share count. Footnote (3) explains that stock compensation counted under restructuring was excluded from the separate stock compensation row. Check that split when reproducing the adjustments. Salesforce Form 8-K Exhibit 99.1
6. Save a comparison you can update next period
| Record | Fictional entry |
|---|---|
| Period, currency and scope | Two consolidated fiscal years in one currency |
| Reported net-income change | 80 → 76, −4 |
| Change in net adjustments | 15 → 28, +13 |
| Adjusted net income and diluted EPS | 104 and 2.74 |
| Next check | Exclusion criteria for stock compensation and restructuring, and the tax explanation |
Attach the source URL and table title. Use the Salesforce company page to find annual financials and the amendments and adjustments guide to record revised comparisons.
Official sources checked: . Actual filings linked here illustrate presentation and structure; they are not the source of the fictional figures.