Apple 1998 Annual Report Download - page 44

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The following table sets forth the computation of basic and diluted earnings
(loss) per share (in thousands, except net income (loss) and per share amounts):
FOR THE YEARS ENDED
Options to purchase 6.7 million shares of common stock were outstanding at the end of 1998 that were not included in the computation of
diluted earnings per share because the options' exercise price was greater than the average market price of the Company's common shares and,
therefore, the effect would be antidulitive. No options outstanding in 1997 or 1996 were included in the calculation of diluted earnings per
share for those years because the Company had a net loss in each of those years and to do so would have been antidilutive.
RECLASSIFICATIONS
Certain prior year amounts in the accompanying 1997 and 1996 consolidated statements of cash flows have been reclassified in order to
conform to the 1998 presentation.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company intends to adopt SFAS No. 130, "Reporting Comprehensive Income" and SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information", in fiscal 1999. Both statements will require additional disclosure but will not have a material impact on
the Company's consolidated results of operations or financial position. SFAS No. 130 will be reflected in the Company's
41
SEPTEMBER 25, SEPTEMBER 26, SEPTEMBER 27,
1998 1997 1996
------------- ------------- -------------
Numerator (in millions):
Numerator for basic earnings (loss) per share--Net income
(loss).......................................................... $ 309 $ (1,045) $ (816)
Interest expense on convertible debt.............................. 43 -- --
------------- ------------- -------------
Numerator for diluted earnings (loss) per share--Adjusted net
income (loss)................................................... $ 352 $ (1,045) $ (816)
------------- ------------- -------------
------------- ------------- -------------
Denominator:
Denominator for basic earnings (loss) per share-- weighted-average
shares outstanding.............................................. 131,974 126,062 123,734
Effect of dilutive securities:
Convertible preferred stock..................................... 9,091 -- --
Dilutive options................................................ 4,210 -- --
Convertible debt................................................ 22,642 -- --
------------- ------------- -------------
Dilutive potential common shares.................................. 35,943 -- --
------------- ------------- -------------
Denominator for diluted earnings (loss) per share-- adjusted
weighted-average shares and assumed conversions................. 167,917 126,062 123,734
------------- ------------- -------------
------------- ------------- -------------
Basic earnings (loss) per share..................................... $ 2.34 $ (8.29) $ (6.59)
------------- ------------- -------------
------------- ------------- -------------
Diluted earnings (loss) per share................................... $ 2.10 $ (8.29) $ (6.59)
------------- ------------- -------------
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