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ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
(Continued)
NOTE 12. NET INCOME PER SHARE
The Company adopted SFAS No. 128, ‘‘Earnings per Share,’’ in the fiscal year ended November 27,
1998. All prior period share and per share amounts have been restated to comply with SFAS No. 128. 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
(In thousands, except per share data)
November 27 November 28 November 29
1998 1997 1996
Net income ...................................... $105,144 $186,837 $153,277
Shares used to compute basic net income per share (weighted
average shares outstanding during the period, excluding
unvested restricted stock) ........................... 66,433 71,962 72,454
Dilutive common equivalent shares:
Unvested restricted stock ............................. 60 120 97
Stock options ..................................... 1,481 2,055 2,581
Put warrants ...................................... — 23 —
Shares used to compute diluted net income per share ........ 67,974 74,160 75,132
Basic net income per share ........................... $ 1.58 $ 2.60 $ 2.12
Diluted net income per share ......................... $ 1.55 $ 2.52 $ 2.04
For the years ended November 27, 1998, November 28, 1997, and November 29, 1996, options to
purchase approximately 177,000; 949,000; and 492,000 shares, respectively, of common stock with exercise
prices greater than the average fair market value of the Company’s stock for the period of $39.56, $41.44
and $38.46, respectively, were not included in the calculation because the effect would have been
antidilutive.
NOTE 13. COMMITMENTS AND CONTINGENCIES
Lease commitments
The Company leases certain of its facilities and some of its equipment under non-cancelable operating
lease arrangements that expire at various dates through 2015. Rent expense for these leases aggregated
$22.1 million, $17.8 million, and $18.3 million during fiscal 1998, 1997, and 1996, respectively. As of
November 27, 1998, future minimum lease payments under noncancelable operating leases, net of sublease
income, are as follows: 1999—$21.1 million; 2000—$16.7 million; 2001—$14.9 million; 2002—$3.3 million;
2003—$2.9 million; and $10.1 million thereafter.
Included in the future minimum lease payments are the following amounts for leased facilities vacated
in connection with the Restructuring plan implemented in the third quarter of fiscal 1998: 1999—
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