Adobe 1999 Annual Report Download - page 75

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ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
(Continued)
74
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
December 3 November 27 November 28
1999 1998 1997
(in thousands except per share data)
Net income ....................................... $237,751 $105,144 $186,837
Shares used to compute basic net income per share (weighted
average shares outstanding during the period, excluding
unvested restricted stock) ........................... 120,786 132,866 143,924
Dilutive common equivalent shares:
Unvested restricted stock ............................ 565 120 240
Stock options .................................... 7,818 2,962 4,110
Put warrants ..................................... 36 — 46
Shares used to compute diluted net income per share ......... 129,205 135,948 148,320
Basic net income per share ............................ $ 1.97 $ 0.79 $ 1.30
Diluted net income per share .......................... $ 1.84 $ 0.77 $ 1.26
For the years ended December 3, 1999; November 27, 1998; and November 28, 1997, options to
purchase approximately 7.2 million, 0.4 million, and 1.9 million shares, respectively, of common stock with
exercise prices greater than the average fair market value of the Company’s stock for the period of $39.75,
$19.78, and $20.72, 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 noncancelable operating
lease arrangements that expire at various dates through 2015. Rent expense for these leases aggregated
$29.4 million, $22.1 million, and $17.8 million during fiscal 1999, 1998, and 1997, respectively. As of
December 3, 1999, future minimum lease payments under noncancelable operating leases, net of sublease
income, are as follows:2000—$21.3 million; 2001—$20.0 million; 2002—$16.9 million; 2003—$14.0 million;
2004—$5.9 million; and $2.8 million thereafter.
Included in the future minimum lease payments are the following amounts, net of anticipated sublease
income, for leased facilities vacated in connection with the restructuring plans implemented in fiscal 1999