Creative 2002 Annual Report Download - page 32

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30
NOTE 2 – NET (LOSS) INCOME PER SHARE
In accordance with SFAS 128, “Earnings per Share”, Creative reports both basic earnings per share and diluted earnings
per share. Basic earnings per share is computed using the weighted average number of ordinary shares outstanding during
the period. Diluted earnings per share is computed using the weighted average number of ordinary and potentially
dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares are excluded from the
computation if their effect is anti-dilutive. In computing the diluted earnings per share, the treasury stock method is used
to determine, based on average stock prices for the respective periods, the ordinary equivalent shares to be purchased
using proceeds received from the exercise of such equivalent shares. Other than the dilutive effect of stock options, there
are no other financial instruments that would impact the weighted average number of ordinary shares outstanding used
for computing diluted earnings per share. The potentially dilutive ordinary equivalent shares outstanding under the
employee share purchase plan were not material.
Following is a reconciliation between the average number of ordinary shares outstanding and equivalent shares outstanding
(in ’000):
As of June 30
2002 2001 2000
Weighted average ordinary shares outstanding 73,182 79,049 82,028
Weighted average dilutive stock options outstanding – – 4,584
Weighted average ordinary shares and
equivalents outstanding 73,182 79,049 86,612
For the fiscal year 2002 and 2001, approximately 2.4 million and 2.0 million potentially dilutive shares were excluded
from the determination of diluted net loss per share, as the effect of including such shares is anti-dilutive.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS