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## 17. EARNINGS PER SHARE 

Basic EPS is calculated by dividing income from continuing operations by the weighted-average number of common shares outstanding during the period. Diluted EPS is calculated by dividing income from continuing operations by the weighted-average number of common shares outstanding plus the assumed exer- cise of all dilutive securities using the treasury stock method. During periods of net operating loss, all com- mon stock equivalents, including the effect of common shares from the issuance of Preferred Stock on an “as converted” basis, are excluded from the diluted EPS calculation. Significant components of the numerator and denominator used for basic and diluted EPS are as follows (in thousands, except per share amounts): 

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Due to their antidilutive effect, the following incremental shares from the effect of the Preferred Stock on an “as converted basis” and options to purchase common stock have been excluded from the EPS calculations: 

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Options to purchase 1,661,875 shares of common stock with exercise prices ranging from $23.00 to $34.50 per share were outstanding during fiscal 1998 but were excluded in the calculation of diluted EPS because the exercise price was greater than the average market price of the common shares. 

## 18. STATEMENTS OF CASH FLOWS 

The following supplemental disclosures are provided for the consolidated statements of cash flows (in thousands): 

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