Apple 1997 Annual Report Download - page 42

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ADVERTISING COSTS
Advertising costs are charged to expense the first time the advertising takes place.
EARNINGS (LOSS) PER SHARE
Earnings (loss) per share is computed using the weighted average number of common shares outstanding and (in 1995 only) the dilutive effect
of common stock options using the treasury stock method. Common stock options, the convertible subordinated notes, the preferred stock, and
certain common shares issued pending shareholder approval were not included in the computations of loss per share in 1997 and/or 1996 as
their effect was antidilutive.
In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" ("FAS 128"). Under the provisions of FAS 128, primary earnings per share will be replaced with basic earnings per share, and fully
diluted earnings per share will be replaced with diluted earnings per share for companies with potentially dilutive securities such as outstanding
options, convertible debt and preferred stock. FAS 128 is effective for annual and interim periods ending after December 15, 1997 and will
require restatement of all comparative per share amounts. The basic loss per share will be no different than the primary loss per share as
presented in the accompanying consolidated statements of operations as neither consider outstanding options, convertible debt or preferred
stock. If and when the Company becomes profitable, it will be required to present both basic and diluted earnings per share. Basic earnings per
share, which does not consider potentially dilutive securities, will be greater than the replaced primary earnings per share which did consider
those securities. Diluted earnings per share will not differ materially from the replaced fully diluted earnings per share.
RECLASSIFICATIONS
Certain prior year amounts in the Industry Segment and Geographic Information footnote have been reclassified to conform to the current
year's presentation.
FINANCIAL INSTRUMENTS
INVESTMENTS
The following table summarizes the Company's available-for-sale securities at amortized cost, which approximates fair value, as of September
26, 1997 and September 27, 1996:
Gross unrealized gains and losses were negligible as of September 26, 1997 and September 27, 1996.
39
1997 1996
AMORTIZED COST AMORTIZED COST
--------------- ---------------
(IN MILLIONS)
U.S. Treasury securities............................................... $ 100 $ 86
U.S. corporate securities.............................................. 327 330
Foreign securities..................................................... 705 1,098
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Total included in cash and cash equivalents.......................... 1,132 1,514
U.S. corporate securities.............................................. 29 --
Foreign securities..................................................... 200 193
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Total included in short-term investments............................. 229 193
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Total................................................................ $ 1,361 $ 1,707
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