Restricted Stock
Plan
We adopted a restricted stock award plan in fiscal 2001. The plan
authorizes us to issue up to 1.5 million shares of our common stock to
our eligible employees, consultants and independent contractors, as
well as to our Board of Directors. Restricted shares have the same
rights as other shares of common stock, except they are not
transferable until fully vested. Restrictions lapse over a vesting
period of at least three years, during which no more than 25% may vest
at the time of award, and no more than 25% may vest on each
anniversary date thereafter. All shares still subject to restrictions
are forfeited and returned to the plan if the plan participant’s
relationship with us were to be terminated. The number of shares
granted under this plan has not been significant.
Earnings per Share
Basic earnings per share is computed based on the weighted average
number of common shares outstanding. Diluted earnings per share is
computed based on the weighted average number of common shares
outstanding adjusted by the number of additional shares that would
have been outstanding had the potentially dilutive common shares been
issued. Potentially dilutive shares of common stock include stock
options; convertible debentures, assuming certain criteria are met
(see note 4, Convertible Debentures); and other stock-based awards
granted under stock-based compensation plans. The computation of
dilutive shares excluded antidilutive outstanding stock options to
purchase 24.6 million, 7.2 million and 7.2 million shares as of March
1, 2003; March 2, 2002; and March 3, 2001, respectively, because the
exercise prices for those options were greater than the average market
price of the common shares. The shares related to the convertible
debentures were not included in our diluted earnings per share
computation, as the criteria for conversion of the debentures were not
met.
The following table
presents a reconciliation of the numerators and denominators of basic
and diluted earnings per common share from continuing operations for
fiscal 2003, 2002 and 2001:
2003
2002
2001
Numerator:
Earnings from continuing
operations
$ 622
$ 570
$ 401
Denominator
(in millions):
Weighted average common
shares outstanding
321.1
316.0
310.0
Effect of dilutive
securities:
Employee stock
options
3.7
6.5
9.0
Weighted
average common shares outstanding assuming dilution
324.8
322.5
319.0
Basic
earnings per share – continuing operations
$ 1.93
$ 1.80
$ 1.29
Diluted
earnings per share – continuing operations
$ 1.91
$ 1.77
$ 1.26
Repurchase of Common
Stock In fiscal 2000, our Board of Directors authorized the purchase of
up to $400 of our common stock from time to time through open market
purchases. This program has no stated expiration date. As of March 1,
2003, 2.9 million shares had been purchased and retired at a cost of
$100. No shares were purchased in fiscal 2003, 2002 or 2001.
6.
Net Interest Income
Net interest income in
fiscal 2003, 2002 and 2001 was comprised of the following:
2003
2002
2001
Interest expense
$ (30)
$ (21)
$ (7)
Loss on early retirement
of debt
—
(8)
—
Capitalized interest
5
1
—
Interest income
23
27
44
Net interest (expense)
income
(2)
(1)
37
Interest expense
allocated to discontinued operations
(6)
(19)
(1)
Net interest income from
continuing operations
$ 4
$ 18
$ 38
We allocated interest
expense to discontinued operations based upon debt that was
attributable to the operations, including an $8 loss on the early
retirement of debt in fiscal 2002. >>
