Consolidated Statements of Changes in Stockholders’ Equity Common Stock Par Value Additional Unrealized Gain  Total Number ($.01 Per Paid-In Retained Treasury on Marketable  Stockholders’ of shares Share) Capital Earnings Stock Equity Securities Equity Balance, December 31, 1999 39,445,198 $394,452) $93,564,326) $212,103,142) ($22,009,449) $116,000,000) $400,052,471) Net income 120,802,261 ) 120,802,261 ) Change in unrealized gain on  marketable equity securities  (net of deferred tax of $22,994,436) (40,719,712) (40,719,712) Reclassification adjustment for  amounts included in net income  (net of income tax of $29,954,217) (55,410,000) (55,410,000) Stock options exercised: various prices per share 140,217 ) 6,627,900 ) 6,768,117 ) Purchase of treasury stock: 1,176 shares (70,426) (70,426) Income tax benefit from exercise  of non-qualified stock options 3,002,720 ) 3,002,720 ) Balance, December 31, 2000 39,445,198) $394,452) $96,707,263) $332,905,403) ($15,451,975) $19,870,288) $434,425,431) Net Income 17,328,529 ) 17,328,529 ) Change in unrealized gain on  marketable securities (net  of deferred tax of $4,077,218) (7,220,144) (7,220,144) Reclassification adjustment for  amounts included in net income  (net of income tax of $1,849,820) (3,275,755) (3,275,755) Stock options exercised: various prices per share (339,623) 793,017 ) 453,394 ) Purchase of treasury stock: 215,000 shares (4,100,350) (4,100,350) Income tax benefit from exercise  of non-qualified stock options 16,451 ) 16,451 ) Balance, December 31, 2001 39,445,198 $394,452) $96,384,091) $350,233,932) ($18,759,308) $9,374,389) $437,627,556) Net Income 24,775,962 ) 24,775,962 ) Change in unrealized gain on  marketable securities (net  of deferred tax of $4,002,730) (7,088,238) (7,088,238) Reclassification adjustment for  amounts included in net income (net of income tax of $457,700) 810,519 ) 810,519 ) Stock options exercised: various prices per share 1,252 ) 3,694,868 ) 3,696,120 ) Purchase of treasury stock: 1,340,135 shares (25,206,523) (25,206,523) Income tax benefit from exercise  of non-qualified stock options 596,732 ) 596,732 ) Balance, December 31, 2002 39,445,198 $394,452) $96,982,075) $375,009,894) ($40,270,963) $3,096,669) $435,212,127) Years ended December 31, 2002, 2001 and 2000 ADTRAN ™ issued 187,750 shares, 37,956 shares, and 315,314 shares of treasury stock to  accommodate employee stock option exercises during 2002, 2001 and 2000, respectively. Comprehensive income in 2002 of $18,498,242 consists of net income of $24,775,962  and unrealized losses on marketable securties of $6,277,720 (net of deferred tax). Comprehensive income in 2001 of $6,832,630 consists of net income of $17,328,529  and unrealized losses on marketable securities of $10,495,899 (net of deferred tax). Comprehensive income in 2000 of $24,672,549 consists of net income of $120,802,261  and unrealized losses on marketable securities of $96,129,712 (net of deferred tax). The accompanying notes are an integral part of these consolidated financial statements. 22 ADTRAN 2002 Annual Report