Adobe 2001 Annual Report Download - page 40

Download and view the complete annual report

Please find page 40 of the 2001 Adobe annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 105

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105

The following table shows the Company’s pro forma results reconciled to the GAAP Consolidated
Statement of Income for fiscal year ended November 30, 2001. Our pro forma results for the fiscal year
2001 exclude restructuring and other charges, amortization of goodwill and purchased intangibles, and
investment loss.
Year ended
November 30,
2001
GAAP income before income taxes ........................ $306,931
Restructuring and other charges ......................... 12,063
Amortization of goodwill and purchased intangibles ........... 14,281
Investment loss ..................................... 93,414
Pro forma income before income taxes .................. 426,689
Income tax provision ................................... 140,807
Pro forma net income .................................. 285,882
Basic pro forma net income per share ...................... $ 1.20
Shares used in computing basic net income per share ........... 238,461
Diluted net income per share ............................ $ 1.15
Shares used in computing diluted net income per share ......... 249,145
Pro Forma Fair Value Disclosures on Employee Stock Plans
We account for our employee stock plans, consisting of fixed stock option plans, an employee stock
purchase plan, and a performance and restricted stock plan, using the intrinsic value method. Please see
our Note 10 of the Notes to Consolidated Financial Statements for the pro forma amounts of net income
and net income per share that would have resulted if we accounted for our employee stock plans under the
fair value recognition provisions of SFAS 123, ‘‘Accounting for Stock-Based Compensation.’’
Recent Accounting Pronouncements
During July 2001, the FASB issued Statement of Financial Accounting Standards No. 141
(‘‘SFAS 141’’), ‘‘Business Combinations.’’ This Statement requires all business combinations to be
accounted for using the purchase method of accounting and redefines goodwill and other intangibles that
should be recognized separate from goodwill. SFAS 141 is effective for all business combinations initiated
after June 30, 2001.
During July 2001, the FASB issued Statement of Financial Accounting Standards No. 142
(‘‘SFAS 142’’), ‘‘Goodwill and Other Intangible Assets.’’ This Statement requires that goodwill and other
intangibles with an indefinite useful life not be amortized, but be tested for impairment at least annually.
SFAS 142 is effective for fiscal years beginning after December 15, 2001; however, for new business
combinations that occur after June 30, 2001, SFAS 142 is effective for those transactions. We will adopt
SFAS 142 beginning in our fiscal year 2003. We are currently evaluating the impact of SFAS 142 on our
financial statements and related disclosures.
In June 2001, the FASB issued Statement of Financial Accounting Standards No. 143 (‘‘SFAS 143’’),
‘‘Accounting for Asset Retirement Obligations.’’ This Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. This Statement applies to legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development, or normal use of the asset. As
used in this Statement, a legal obligation results from existing law, statute, ordinance, written or oral
contract, or by legal construction of a contract under the doctrine of promissory estoppel. SFAS 143 is
40