Adobe 2001 Annual Report Download - page 90

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ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Note 12. Net Income Per Share
Basic net income per share is computed using the weighted average number of common shares
outstanding for the period, excluding unvested restricted stock. Diluted net income per share is based upon
the weighted average common shares outstanding for the period plus dilutive common equivalent shares,
including unvested restricted common stock, stock options using the treasury stock method, and put
warrants using the reverse treasury stock method.
Years Ended
November 30, December 1, December 3,
2001 2000 1999
(in thousands except per share data)
Net income ....................................... $205,644 $287,808 $237,751
Shares used to compute basic net income per share (weighted
average shares outstanding during the period, excluding
unvested restricted stock) ........................... 238,461 238,292 241,572
Dilutive common equivalent shares:
Unvested restricted stock ........................... 318 930 1,130
Stock options .................................... 10,366 16,539 15,636
Put warrants ..................................... — 13 72
Shares used to compute diluted net income per share ........ 249,145 255,774 258,410
Basic net income per share ............................ $ 0.86 $ 1.21 $ 0.98
Diluted net income per share .......................... $ 0.83 $ 1.13 $ 0.92
For the years ended November 30, 2001, December 1, 2000, and December 3, 1999, options to
purchase approximately 17.7 million, 12.1 million, and 7.2 million shares, respectively, of common stock
with exercise prices greater than the average fair market value of our stock for the period of $39.57, $56.63,
and $39.75, respectively, were not included in the calculation because the effect would have been
antidilutive.
Note 13. Commitments and Contingencies
Lease Commitments
We lease certain of our facilities and some of our equipment under noncancelable operating lease
arrangements that expire at various dates through 2025. Rent expense, net of sublease income, for these
leases aggregated $22.0 million, $25.6 million, and $29.4 million during fiscal 2001, 2000, and 1999,
respectively. As of November 30, 2001, future minimum lease payments under noncancelable operating
leases, net of sublease income, are as follows: 2002—$29.6 million; 2003—$32.3 million; 2004—
$35.7 million; 2005—$28.5 million; 2006—$17.0 million; and $33.2 million thereafter.
In September 2001, we entered into a real estate development agreement for the construction of an
office building in downtown San Jose, California. Under the agreement the lessor will finance up to
$117.0 million over a two-year period, toward the construction and associated costs of the building. As part
of the agreement, we entered into a five-year lease beginning upon completion of the building. We have an
option to purchase the building at any time during the term for an amount equal to the total investment of
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