The reason why "one-time, non-recurring" charges are traditionally excluded from a company's adjusted bottom line calculation is because they are, at least in theory, one-time and non-recurring. So, after looking at the chart below which breaks out Bank of America's quarterly litigation charges alongside its net income, can someone please explain to us why anyone is still showing the bank's pro forma EPS excluding litigation charges?
Just to put it in context, in the past 2 years, Bank of America has incurred $20 billion in litigation charges. Its net income during this period: $11.9 billion.
And adding insult to injury, just as we were going to press, this hit:
- BOFA SAID TO OFFER $13B TO SETTLE MORTGAGE SECURITIES PROBE:WSJ
Which means before the end of 2014, litigation charges for Bank of America since 2012 will rise to over $30 billion! And we thought JPMorgan was bad...