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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
employee stock purchase plans. As of December 31, 2004, we had reacquired a total of 108.6 million shares at a cost of $1,054.9 million.
On July 1, 2004, the Massachusetts Business Corporation Act (the "MBCA") became effective and eliminated treasury shares. Under the MBCA, shares
repurchased by Massachusetts corporations constitute authorized but unissued shares. As a result, all of our former treasury shares were automatically
converted to unissued shares on July 1, 2004 and have been accounted for as a reduction of common stock (at par value) and additional paid-in capital.
Net Income (Loss) Per Share
The reconciliation from basic to diluted earnings per share for both the numerators and denominators is as follows (table in thousands, except per share
amounts):
2004 2003 2002
Numerator:
Net income (loss), as reported–basic $ 871,189 $ 496,108 $ (118,706)
Adjustment for interest expense on convertible debt, net of taxes 2,572 – –
Net income (loss)–diluted $ 873,761 $ 496,108 $ (118,706)
Denominator:
Basic weighted average common shares outstanding 2,402,198 2,211,544 2,206,294
Weighted common stock equivalents 39,316 26,112 –
Assumed conversion of convertible debt 9,056 – –
Diluted weighted average shares outstanding 2,450,570 2,237,656 2,206,294
Options to acquire 101.7 million, 92.0 million and 177.6 million shares of common stock as of December 31, 2004, 2003 and 2002, respectively, were
excluded from the calculation of diluted earnings per share because of their antidilutive effect. The effect of our senior convertible debt (see Note D) assumed
in connection with our acquisition of Documentum on the calculation of diluted net income per weighted average share for the year ended December 31, 2004
was calculated using the "if converted" method. The convertible debt was excluded from the calculation of diluted earnings per share in 2003 because of its
antidilutive effect.
Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss), which is presented net of tax, consists of the following (table in thousands):
December 31, December 31,
2004 2003
Foreign currency translation adjustments, net of tax benefits of $10,716 and $5,737 $ (11,416) $ (10,873)
Unrealized losses on investments, net of tax benefits of $7,341 and $0 (31,164) –
Unrealized gains on investments, net of taxes of $3,147 and $7,706 7,689 13,070
Unrealized losses on derivatives, net of tax benefits of $0 and $0 (31) –
$ (34,922) $ 2,197
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