Let's go to the heart of the matter. From the Q's latest 10-Q filed in January. States exactly how Q calculates reported net earnings per share. Please carefully note the stuff I've boldened:
Net Earnings Per Common Share
Basic net earnings per common share are calculated by dividing net income or loss by the weighted average number of
common shares outstanding during the reporting period. Diluted net earnings per common share (diluted EPS) for the three
months ended December 30, 2001 reflect the potential dilutive effect, calculated using the treasury stock method, of
44,615,000 additional common shares issuable upon exercise of outstanding stock options and the potential dilutive
effect. The diluted base for the three months ended December 31, 2000 excludes the potential dilutive effect, calculated
using the treasury stock method, of 56,567,000 additional common shares issuable upon exercise of outstanding stock options
due to their anti-dilutive effect as a result of the Company's loss before accounting change.
Options outstanding during the three months ended December 30, 2001 and December 31, 2000 to purchase approximately
24,131,000 and 8,097,000 shares of common stock, respectively, were not included in the treasury stock computation of
diluted EPS because the options' exercise price was greater than the average market price of the common stock during the
period and, therefore, the effect would be anti-dilutive.
If I were bloody minded, I'd insist that the 88,000,000, plus or minus, in anti-dilutive stock options be included in the calculation of net earnings per share because they represent options which are underwater and therefore are elements of compensation which do not have to be paid and are unlikely to be paid anytime soon. A cost savings, by golly, since there is unlikely to be any dilution on account of those shares. But I'm not bloody minded.
How do you like dem apples? |
