Apple 1999 Annual Report Download - page 45

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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):
Options to purchase 1.2 million and 6.7 million shares of common stock were outstanding at the end of 1999 and 1998, respectively, 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 for those years and, therefore, the effect would be antidilitive. No options outstanding were included in the
calculation of diluted earnings per share for 1997 because the Company had a net loss and to do so would have been antidilutive.
COMPREHENSIVE INCOME
The Company adopted SFAS No. 130, "Reporting Comprehensive Income," beginning with the Company's first quarter of 1999. SFAS No.
130 separates comprehensive income into two components, net income and other comprehensive income. Other comprehensive income refers
to revenue, expenses, gains and losses that under generally accepted accounting principles are recorded as an element of shareholders' equity
but are excluded from net income. While SFAS No. 130 establishes new rules for the reporting and display of comprehensive income, it has no
impact on the Company's net income (loss) or total shareholders' equity. The Company's other comprehensive income is comprised of foreign
currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency and from unrealized gains and
losses on marketable securities categorized as available-for-sale.
41
FOR THE YEARS ENDED SEPTEMBER 25, 1999 SEPTEMBER 25, 1998 SEPTEMBER 26, 1997
------------------- ------------------ ------------------ ------------------
Numerator (in millions):
Numerator for basic earnings (loss) per
share--net income (loss)............... $ 601 $ 309 $ (1,045)
Interest expense on convertible debt..... 28 43 --
-------- -------- --------
Numerator for diluted earnings (loss) per
share--adjusted net income (loss)...... $ 629 $ 352 $ (1,045)
-------- -------- --------
Denominator:
Denominator for basic earnings (loss) per
share--weighted-average shares
outstanding............................ 143,157 131,974 126,062
Effect of dilutive securities:
Convertible preferred stock.............. 9,091 9,091 --
Dilutive options......................... 5,819 4,210 --
Convertible debt......................... 16,097 22,642 --
-------- -------- --------
Dilutive potential common shares........... 31,007 35,943 --
-------- -------- --------
Denominator for diluted earnings (loss) per
share--adjusted weighted-average shares
and assumed conversions.................. 174,164 167,917 126,062
======== ======== ========
Basic earnings (loss) per share............ $ 4.20 $ 2.34 $ (8.29)
======== ======== ========
Diluted earnings (loss) per share.......... $ 3.61 $ 2.10 $ (8.29)
======== ======== ========