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Note 5 – Shareholders’ Equity and Stock-Based Compensation Preferred Stock

The Company has five million shares of authorized preferred stock, none of which is issued or outstanding. Under the terms of the Company’s Restated Articles of Incorporation, the Board of Directors is authorized to determine or alter the rights, preferences, privileges and restrictions of the Company’s authorized but unissued shares of preferred stock.

Comprehensive Income

Comprehensive income consists of two components, net income and other comprehensive income. Other comprehensive income refers to revenue, expenses, gains, and losses that under GAAP are recorded as an element of shareholders’ equity but are excluded from net income. The Company’s other comprehensive income consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency, unrealized gains and losses on marketable securities categorized as available-for-sale, and net deferred gains and losses on certain derivative instruments accounted for as cash flow hedges.

The following table summarizes the components of total comprehensive income, net of taxes, during the three- and six-month periods ended March 26, 2011 and March 27, 2010 (in millions):

March 26,

March 27,

March 26,

March 27,

2011

2010

2011

2010

(82)

10

161

28

74

6

90

11

20

(2)

(79)

9

$ 5,999

$ 3,088

$12,163

$ 6,500

Net income Other comprehensive income: Change in unrecognized gains/losses on derivative instruments Change in foreign currency translation Change in unrealized gains/losses on marketable securities

Total comprehensive income

Three Months Ended

Six Months Ended

$ 5,987

$ 3,074

$11,991

$ 6,452

The following table summarizes activity in other comprehensive income related to derivatives, net of taxes, held by the Company during the three- and six-month periods ended March 26, 2011 and March 27, 2010 (in millions):

$

(140)

$

30

$

(183)

$

36

58

(20)

344

(8)

$

(82)

$

10

$

161

$

28

March 26,

March 27,

March 26,

March 27,

2011

2010

2011

2010

Change in fair value of derivatives

Adjustment for net gains/losses realized and included in income Change in unrecognized gains/losses on derivative instruments

Three Months Ended

Six Months Ended

The following table summarizes the components of AOCI, net of taxes, as of March 26, 2011 and September 25, 2010 (in millions):

$

92 (91) 125

$

171 (252) 35

$

126

$

(46)

Net unrealized gains/losses on marketable securities Net unrecognized gains/losses on derivative instruments Cumulative foreign currency translation

Accumulated other comprehensive income/(loss)

March 26, 2011

September 25, 2010

14

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