Zeev, some companies include a number of items in Pro Forma EPS.
An excerpt from CSCO'S last 10Q :
PRO FORMA CONSOLIDATED DATA
We provide pro forma net income and pro forma net income per share data as an alternative for understanding our operating results. These measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from pro forma measures used by other companies. Pro forma net income and pro forma net income per share diluted are calculated as follows (in millions, except per-share amounts):
Three Months Ended
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October 27, October 28,
2001 2000
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Net income (loss) $ (268) $ 798
In-process research and development 37 509
Payroll tax on stock option exercises (1) 3 22
Amortization of deferred stock-based compensation (2) 50 6
Amortization of goodwill -- 144
Amortization of purchased intangible assets 146 81
Net (gains) losses on investments 858 (190)
Excess inventory benefit (290) --
Income tax effect (204) (7)
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Pro forma net income $ 332 $ 1,363
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Pro forma net income per share -- diluted $ 0.04 $ 0.18
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Shares used in per-share calculation -- diluted (3) 7,466 7,580
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Note 1: Payroll tax on stock option exercises of $3 million for the first quarter of fiscal 2002 was allocated to R&D ($1 million) and sales and marketing ($2 million) expenses in the Consolidated Statements of Operations. Payroll tax on stock option exercises of $22 million for the first quarter of fiscal 2001 was allocated to R&D ($8 million), sales and marketing ($12 million), and G&A ($2 million) expenses in the Consolidated Statements of Operations.
Note 2: Amortization of deferred stock-based compensation related to purchase acquisitions of $50 million for the first quarter of fiscal 2002 was allocated to R&D ($41 million), sales and marketing ($8 million), and G&A ($1 million) expenses in the Consolidated Statements of Operations. Amortization of deferred stock-based compensation related to purchase acquisitions of $6 million for the first quarter of fiscal 2001 was allocated to R&D ($5 million) and G&A ($1 million) expenses in the Consolidated Statements of Operations.
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