4. Looking at that second page some more, notice the part that says "Stock options excluded from the diluted EPS calculation because the exercise price was greater than the average market price of the common shares. What does this mean? 2005 The following table summarizes the potential shares of common stock that were excluded from the diluted per share calculation, because the effect of including these potential shares was antidilutive. 2003 in millions) 800% convertible securities 775% convertible securities 2.75% convertible securities Stock options 293 Potentially dilutive shares Years ended September 30, 2004 70 228 6:35 273 326 14 1 290 Stock options excluded from the diluted per share calculation because the exercise price was greater than the average market price of the common shares 297 252 300 The calculation of dilutive or potentially dilutive common shares related to our convertible securities considers the conversion features or redemption features, whichever are more dilutive. Redemption features are only considered if we have the right to settle redemption requests through the issuance of our common stock, as in the case of our 2.75% and 8.00% convertible securities. In this case, the if redeemed" calculations are based upon the 12-month average price of our common stock and the weighted average number of the respective securities outstanding during the periods presented. The dilutive effect of our convertible securities may fluctuate from period to period as a result of the as reported net income levels and the average market pnce of our common stock In September 2004, the FASB's Emerging Issues Task Force (EITF) finalized EITF Issue No 04-8, The Effect of Contingently Convertible Instruments on Diluted Earnings per Share". As a result, beginning in the first quarter of fiscal 2005, the conversion features related to our 2.75% convertible securities are always considered in the diluted EPS calculation and are used unless the if redeemed" calculation is more dilutive The impact of EITF 04-8 did not materially affect our diluted EPS calculations and would not have changed our quarterly or annual fiscal 2004 diluted EPS 4. Looking at that second page some more, notice the part that says "Stock options excluded from the diluted EPS calculation because the exercise price was greater than the average market price of the common shares. What does this mean? 2005 The following table summarizes the potential shares of common stock that were excluded from the diluted per share calculation, because the effect of including these potential shares was antidilutive. 2003 in millions) 800% convertible securities 775% convertible securities 2.75% convertible securities Stock options 293 Potentially dilutive shares Years ended September 30, 2004 70 228 6:35 273 326 14 1 290 Stock options excluded from the diluted per share calculation because the exercise price was greater than the average market price of the common shares 297 252 300 The calculation of dilutive or potentially dilutive common shares related to our convertible securities considers the conversion features or redemption features, whichever are more dilutive. Redemption features are only considered if we have the right to settle redemption requests through the issuance of our common stock, as in the case of our 2.75% and 8.00% convertible securities. In this case, the if redeemed" calculations are based upon the 12-month average price of our common stock and the weighted average number of the respective securities outstanding during the periods presented. The dilutive effect of our convertible securities may fluctuate from period to period as a result of the as reported net income levels and the average market pnce of our common stock In September 2004, the FASB's Emerging Issues Task Force (EITF) finalized EITF Issue No 04-8, The Effect of Contingently Convertible Instruments on Diluted Earnings per Share". As a result, beginning in the first quarter of fiscal 2005, the conversion features related to our 2.75% convertible securities are always considered in the diluted EPS calculation and are used unless the if redeemed" calculation is more dilutive The impact of EITF 04-8 did not materially affect our diluted EPS calculations and would not have changed our quarterly or annual fiscal 2004 diluted EPS
