eTrade 2003 Annual Report Download - page 105

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Table of Contents
Index to Financial Statements
NOTE 22—INCOME (LOSS) PER SHARE
The following table is a reconciliation of basic and diluted EPS (in thousands, except per share data):
Because the Company reported a net loss before and after cumulative effect of accounting change for 2001, the calculation of diluted net
loss per share does not include common stock equivalents as they are anti-dilutive and would result in a reduction of net loss per share. If the
for 2001. In addition there would have been an additional amount of shares for warrants outstanding of 198,000 for 2001. For the three months
ended December 31, 2003, diluted income before cumulative effect of accounting change per share and net income per share are calculated
using the ‘if converted’ method, which includes the additional dilutive impact of the Company’s subordinated convertible debt assuming their
conversion during the period. Under the ‘if converted’ method, the per share numerator excludes the interest expense from the convertible debt
of $7.2 million and the denominator includes the shares issuable from the assumed conversion of the convertible debt of 45.4 million. For all
other periods, the ‘if converted’ method is not used as its effect would be anti-dilutive.
The following options to purchase shares of common stock have not been included in the computation of diluted income (loss) per share
because the options’ exercise price was greater than the average market price of the Company’s common stock for the following years stated,
therefore, the effect would be anti-dilutive (in thousands, except exercise price ranges):
92
Year Ended December 31,
2003
2002
2001
Earnings per Share
Earnings per Share
Basic and
Diluted EPS
Basic
Diluted
Basic
Diluted
Income (loss) before cumulative effect of accounting change
$
203,027
$
203,027
$
107,264
$
107,264
$
(241,532
)
Cumulative effect of accounting change, net of tax
—
—
(
293,669
)
(293,669
)
—
Net income (loss)
$
203,027
$
203,027
$
(186,405
)
$
(186,405
)
$
(241,532
)
Total weighted
-
average shares outstanding
358,320
358,320
355,090
355,090
332,370
Effect of dilutive securities:
Weighted-average options and restricted stock
issued to employees
—
6,495
—
4,300
—
Weighted-average warrants and contingent shares
outstanding
—
2,546
—
1,661
—
Total weighted
-
average basic and diluted shares outstanding
358,320
367,361
355,090
361,051
332,370
Income (loss) per share before cumulative effect of accounting
change
$
0.57
$
0.55
$
0.30
$
0.30
$
(0.73
)
Income (loss) per share
$
0.57
$
0.55
$
(0.52
)
$
(0.52
)
$
(0.73
)
Year Ended December 31,
2003
2002
2001
Options excluded from computation of diluted income (loss) per share
14,860
26,936
18,358
Exercise price ranges:
High
$
58.19
$
58.19
$
58.19
Low
$
7.97
$
6.41
$
8.20