Digital River 2006 Annual Report Download - page 88

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The following table presents the cumulative adjustments of each component of shareholders’ equity at the
end of each fiscal year (in thousands):
Fiscal Year
Additional Paid in
Capital
Deferred Stock
Compensation Retained Earnings
Net Impact to
Shareholders’ Equity
1998 ............. $ 5,170 $(4,998) $ (172) $ —
1999 ............. 8,429 (5,046) (3,383) —
2000 ............. 8,293 (2,672) (5,621) —
2001 ............. 11,103 (3,368) (7,735) —
2002 ............. 11,783 (2,368) (9,415) —
2003 ............. 11,798 (1,143) (10,655) —
2004 ............. 11,813 (341) (11,472) —
2005 ............. $ 9,761 $ (48) $ (9,304) $409
3. Net Income per Share:
Basic income per common share is computed by dividing net income by the weighted average number of
shares of common stock outstanding during the period. Diluted earnings per common share is calculated by
dividing net income, adjusted to exclude interest expense and financing cost amortization related to potentially
dilutive securities, by the weighted average number of common shares related to potentially dilutive securities
outstanding during the period, plus any additional common shares that would have been outstanding if
potentially dilutive common shares had been issued during the period.
The following table summarizes the computation of basic and diluted earnings per share (in thousands,
except per share data):
2006 2005 2004
For the Years Ended December 31,
Restated(1) Restated(1)
Earnings per share — basic
Net income — basic ................................. $60,810 $56,512 $34,507
Weighted average shares outstanding — basic .............. 38,593 34,536 32,328
Earnings per share — basic . ........................... $ 1.58 $ 1.64 $ 1.07
Earnings per share — diluted
Net income — basic ................................. $60,810 $56,512 $34,507
Exclude: Interest expense and amortized financing cost of
convertible senior notes, net of tax benefit ............... 1,739 2,099 1,772
Net income — diluted ................................ $62,549 $58,611 $36,279
Weighted average shares outstanding — basic .............. 38,593 34,536 32,328
Dilutive impact of non-vested stock and options outstanding . . . 1,624 2,487 3,626
Dilutive impact of convertible senior notes ................ 4,425 4,425 2,578
Weighted average shares outstanding — diluted ............. 44,642 41,448 38,532
Earnings per share — diluted ........................... $ 1.40 $ 1.41 $ 0.94
(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial
Statements.
84
DIGITAL RIVER, INC.
Notes to Consolidated Financial Statements — (Continued)