Apple 2002 Annual Report Download - page 62

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The Company had exercisable options to purchase 42.1 million shares outstanding as of September 29, 2001 with a weighted average exercise
price of $32.15. As of September 30, 2000, the Company had exercisable options outstanding to purchase 23.7 million shares with a weighted
average exercise price of $31.94.
Note 9—Stock-Based Compensation
Pro forma information regarding net income (loss) per share is required by SFAS No. 123 and has been determined as if the Company had
accounted for its employee stock options granted and employee stock purchase plan purchases subsequent to September 29, 1995, under the
fair value method of that statement. The fair values for these options and stock purchases were estimated at the date of grant and beginning of
the period, respectively, using a Black-Scholes option pricing model. The assumptions used for each of the last three fiscal years and the
resulting estimate of weighted-average fair value per share of options granted during those years are as follows:
79
For purposes of pro forma disclosures, the estimated fair value of the options and shares are amortized to pro forma net income over the
options' vesting period and the shares' plan period. The Company's pro forma information for each of the last three fiscal years follows (in
millions, except per share amounts):
Note 10—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 3 to 5 additional years. Leases for retail space are for terms of 5 to
12 years and often contain multi
-
year renewal options. Rent expense under all operating leases, including both cancelable and noncancelable
$0.83
-
$17.31
22,000
6.63
$
14.26
13,459
$
12.74
$17.32
-
$18.50
26,785
8.32
$
18.40
10,138
$
18.38
$18.51
-
$25.93
20,851
8.86
$
21.35
4,902
$
21.14
$25.94
-
$43.59
21,492
7.27
$
42.92
20,896
$
43.16
$43.60
-
$
69.78
18,302
7.37
$
49.64
8,529
$
49.71
$0.83
-
$
69.78
109,430
7.72
$
28.17
57,924
$
30.85
2002
2001
2000
Expected life of stock options
4 years
4 years
4 years
Expected life of stock purchases
6 months
6 months
6 months
Interest rate
—
stock options
2.90
%
4.90
%
6.20
%
Interest rate
—
stock purchases
2.71
%
5.97
%
6.21
%
Volatility
—
stock options
64
%
66
%
67
%
Volatility
—
stock purchases
51
%
90
%
60
%
Dividend yields
0
0
0
Weighted
-
average fair value of options granted during the year
$
10.11
$
10.15
$
25.92
Weighted
-
average fair value of stock purchases during the year
$
6.73
$
11.15
$
10.66
2002
2001
2000
Net income (loss)
—
as reported
$
65
$
(25
)
$
786
Net income (loss)
—
pro forma
$
(164
)
$
(396
)
$
483
Net income (loss) per common share
—
as reported
Basic $
0.18
$
(0.07
) $
2.42
Diluted $
0.18
$
(0.07
) $
2.18
Net income (loss) per common share
—
pro forma
Basic $
(0.46
) $
(1.15
) $
1.49
Diluted $
(0.46
) $
(1.15
) $
1.38