Apple 2003 Annual Report Download - page 54

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The following table sets forth the computation of basic and diluted earnings per share:
Options to purchase 50.8 million and 58.0 million shares of common stock were outstanding at the end of 2003 and 2002, respectively, that
were not included in the computation of diluted earnings per share for that year because the options' exercise price was greater than the average
market price of the Company's common shares for that year and, therefore, the effect would be antidilutive. At September 29, 2001, the
Company had options to purchase 97.2 million shares of its common stock outstanding, all of which were excluded from the computation of
diluted loss per share for 2001 because the effect would have been antidilutive.
Comprehensive Income
Comprehensive income consists of 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. 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, unrealized gains and losses on marketable securities categorized as
available-for-sale, and net deferred gains and losses on certain derivative instruments accounted for as cash flow hedges.
Segment Information
The Company reports segment information based on the "management" approach. The management approach designates the internal reporting
used by management for making decisions and assessing performance as the source of the Company's reportable segments. Information about
the Company's products, major customers, and geographic areas on a company-wide basis is also disclosed.
68
Note 2—Financial Instruments
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate their fair value
due to the short maturities of those instruments.
For the Years Ended
September 27,
2003
September 28,
2002
September 29,
2001
Numerator (in millions):
Income (loss) before accounting changes
$
68
$
65
$
(37
)
Cumulative effects of accounting changes, net of income
taxes
$
1
$
—
$
12
Net income (loss)
$
69
$
65
$
(25
)
Denominator (in thousands):
Weighted
-
average shares outstanding
360,631
355,022
345,613
Effect of dilutive options and dilutive restricted stock
2,835
6,763
—
Denominator for diluted earnings (loss) per share
363,466
361,785
345,613
Basic earnings (loss) per share before accounting changes
$
0.19
$
0.18
$
(0.11
)
Cumulative effects of accounting changes, net of tax
—
—
$
0.04
Basic earnings (loss) per share after accounting changes
$
0.19
$
0.18
$
(0.07
)
Diluted earnings (loss) per share before accounting changes
$
0.19
$
0.18
$
(0.11
)
Cumulative effects of accounting changes, net of tax
—
—
$
0.04
Diluted earnings (loss) per share after accounting changes
$
0.19
$
0.18
$
(0.07
)