EMC 2005 Annual Report Download - page 88

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Net Income 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):
2005 2004 2003
Numerator:
Net income, as reported - basic $ 1,133,165 $ 871,189 $ 496,108
Adjustment for interest expense on convertible debt, net of taxes 2,572 2,572 —
Net income - diluted $ 1,135,737 $ 873,761 $ 496,108
Denominator:
Basic weighted average common shares outstanding 2,382,977 2,402,198 2,211,544
Weighted common stock equivalents 40,549 39,316 26,112
Assumed conversion of convertible debt 9,056 9,056 —
Diluted weighted average shares outstanding 2,432,582 2,450,570 2,237,656
Options to acquire 91.7 million, 101.7 million and 92.0 million shares of common stock as of December 31, 2005, 2004 and 2003, 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 years ended December 31,
2005 and 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
Accumulated other comprehensive income, which is presented net of tax, consists of the following (table in thousands):
December 31,
2005
December 31,
2004
Foreign currency translation adjustments, net of tax benefits of $0 and $10,716 $ (31,770) $ (11,416)
Unrealized losses on investments, net of tax benefits of $2,538 and $7,341 (38,187) (31,164)
Unrealized gains on investments, net of taxes of $1,887 and $3,147 5,403 7,689
Unrealized gain (losses) on derivatives, net of taxes (benefits) of $96 and $0 867 (31)
$ (63,687) $ (34,922)
Reclassification adjustments between other comprehensive income and the income statement consist of the following (table in thousands):
Year Ended December 31,
2005
2004 2003
Realized gains (losses) on investments, net of taxes
(benefit) of $(21,671), $(4,279) and $5,461 $ (37,260) $ (7,397) $ 25,039
Realized gains (losses) on derivatives, net of taxes (benefit) of
$2,788, $(947) and $(1,557) 25,091 (8,522) (14,017)
Preferred Stock
Our series preferred stock may be issued from time to time in one or more series, with such terms as our Board of Directors may determine, without
further action by our shareholders.
Equity Plans
The EMC Corporation 2003 Stock Plan (the "2003 Plan") provides for the grant of stock options, stock appreciation rights, restricted stock and
restricted stock units. The exercise price for a stock option shall not be less than 100% of the fair market value