Apple 1999 Annual Report Download - page 61
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 7--STOCK-BASED COMPENSATION (CONTINUED)
Company's employee stock options and employee stock purchase plan shares have characteristics significantly different from those of traded
options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of the fair value of the Company's employee stock options and employee
stock purchase plan shares.
For purposes of pro forma disclosures, the estimated fair value of the options and shares are amortized to pro forma net income (loss) over the
options' vesting period and the shares' plan period. The value of the options granted to NeXT optionholders in 1997 has been included in the
total purchase price paid for NeXT and, therefore, is not included in the adjustment to arrive at the pro forma net loss. The Company's pro
forma information for each of the last three fiscal years follows (in millions, except per share amounts):
As SFAS No. 123 is applicable only to options granted or shares issued subsequent to September 29, 1995, its pro forma effect was not fully
reflected until 1999.
NOTE 8--COMMITMENTS AND CONTINGENCIES
LEASE COMMITMENTS
The Company leases various facilities and equipment under noncancelable operating lease arrangements. The major facilities leases are for
terms of 5 to 10 years and generally provide renewal options for terms of up to 5 additional years. Rent expense under all operating leases was
approximately $61 million, $63 million, and $106 million in 1999, 1998, and 1997, respectively. Future minimum lease payments under
noncancelable operating leases having remaining terms in excess of one year as of September 25, 1999, are as follows (in millions):
57
1999 1998 1997
-------- -------- --------
Net income (loss)--as reported....................... $ 601 $ 309 $(1,045)
Net income (loss)--pro forma......................... $ 528 $ 266 $(1,082)
Net income (loss) per common share--as reported
Basic.............................................. $4.20 $2.34 $ (8.29)
Diluted............................................ $3.61 $2.10 $ (8.29)
Net income (loss) per common share--pro forma
Basic.............................................. $3.69 $2.02 $ (8.58)
Diluted............................................ $3.25 $1.83 $ (8.58)
FISCAL YEARS
------------
2000........................................................ $ 46
2001........................................................ 41
2002........................................................ 29
2003........................................................ 19
2004........................................................ 14
Later years................................................. 35
----
Total minimum lease payments................................ $184
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