JPMorgan - KASE

accordingly no compensation cost has been recognized. Had compensation expense been
determined based on fair value at the grant dates for the stock option grants consistent with the
method of SFAS No. 123, the Corporation’s net income and net income per share would have
been reduced to the pro forma amounts as indicated below:
9 months
ended
Sept. 30,
2002
9 months
ended
Sept. 30,
2001
Net income under U.S. GAAP:
Asreported ........................................................ 117,401 146,296
Proforma .......................................................... 115,882 144,735
Basic earnings per share:
Asreported ........................................................ 1.45 1.83
Proforma .......................................................... 1.43 1.81
Stock options vested during period (thousands) ......................... 1,225 1,312
Weighted average exercise price ...................................... 3.05 2.62
Weighted average fair value of options granted during the period ......... 1.24 1.19
The foregoing information is calculated in accordance with the Black-Scholes option pricing
model, using the following data and assumptions: volatility, as of the date of grant, computed
using the prior one to three-year weekly average prices of the Corporation’s Common Shares,
which ranged from 52% to 124%; expected dividend yield—0%; option terms to expiry—4 to 5
years as defined by the option contracts; risk-free rate of return as of the date of grant—4.86%
to 5.96%, based on five year Government of Canada Bond yields.
Consolidated Balance Sheets
The application of United States GAAP would have the following effects on balance sheet items
as reported:
As
Reported
Increase
(Decrease)
United
States
GAAP
September 30, 2002
Currentassets ............................................. 333,554 333,554
Capitalassets.............................................. 382,939 (54,473) 328,466
Futureincometaxassets .................................... 20,891 (6,157) 14,734
Current liabilities .......................................... 164,792 164,792
Long term debt ............................................ 293,197 293,197
Future income tax liability .................................. 17,826 17,826
Provision for future site restoration costs ...................... 3,904 3,904
Minority interest ........................................... 10,357 10,357
Preferredsharesofsubsidiary ............................... 85 85
Shareholders’ equity ....................................... 247,223 (60,630) 186,593
September 30, 2001
Currentassets ............................................. 206,911 206,911
Capitalassets.............................................. 292,660 (45,411) 247,249
Futureincometaxassets .................................... 27,582 27,582
Current liabilities .......................................... 117,170 117,170
Long term debt ............................................ 249,125 249,125
Future income tax liability .................................. 24,341 24,341
Provision for future site restoration costs ...................... 2,800 2,800
Minority interest ........................................... 24,825 24,825
Preferredsharesofsubsidiary ............................... 93 93
Shareholders’ equity ....................................... 108,799 (45,411) 63,387
F-16